STATE TAX COMMISSION OF MISSOURI
| JUN YANG, | ) | |
| ) | Appeal No. 17-10575 | |
| Complainant, | ) | Parcel/Locator No. 15J630699 |
| ) | Appeal No. 17-10576 | |
| v. | )
) |
Parcel/Locator No. 15J340244 |
| )
) |
||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST. LOUIS COUNTY, MISSOURI,
Respondent |
)
) |
DECISION AND ORDER
HOLDING
The decisions of the St. Louis County Board of Equalization (BOE) are AFFIRMED. Complainant Jun Yang (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Complainant appeared pro se.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel Steve Robson.
Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).
ISSUE
With regard to both of the subject properties, Complainant appealed on the ground of overvaluation. Respondent initially determined the true value in money (TVM) of the subject properties, as residential property, as of January 1, 2017, as set forth in the table, below:
| Appeal No. | Parcel/Locator No. | Respondent’s Valuation |
| 17-10575 | 15J630699 | $107,800 |
| 17-10576 | 15J340244 | $57,000 |
The BOE determined the values of the subject properties, as residential property, as of January 1, 2017, as set forth in the table, below:
| Appeal No. | Parcel/Locator No. | BOE’s TVM |
| 17-10575 | 15J630699 | $107,800 |
| 17-10576 | 15J340244 | $53,900 |
The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction or improvement to the property. Section 137.115.1 RSMo 2000, as amended. The State Tax Commission (STC) takes this appeal to determine the TMV for the subject property as of January 1, 2017.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over these appeals is proper. Complainant timely appealed to the State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on April 4, 2018, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri.
- Identification of Subject Property. The subject properties are identified as set forth in the table, below:
| Property | Parcel/Locator No. | Address |
| 17-10575 | 15J630699 | 300 Delavan Dr., Bel Nor, MO 63121 |
| 17-10576 | 15J340244 | 7424 Hillsdale, St. Louis County, MO 63121 |
(Complaints; Exhibit 1; Exhibit 1)
- Description of Subject Property. The subject properties are described as set forth in the table, below:
| Appeal No. | Parcel/Locator No. | Address | Description |
| 17-10575 | 15J630699 | 300 Delavan Dr., Bel Nor, MO 63121 | 7,200 square-foot lot; 1,536 square-foot, one-and-a-half-story, single-family home; three bedrooms; one full bathroom; one half bathroom; built in 1932; partial, unfinished basement; Quality of Construction Q4 or grade C; Condition rating C4 or average |
| 17-10576 | 15J340244 | 7424 Hillsdale, St. Louis County, MO 63121 | 5,401 square-foot lot; 910 square-foot, cottage-style, single-family home; two bedrooms; one bathroom; built in 1943; full, partially-finished basement; Quality of Construction Q5; Condition rating C4 |
- Assessment. Respondent valued the subject properties as described in the table on page 2 of this Decision and Order.
- Board of Equalization. The BOE valued the subject properties as described in the table on page 2 of this Decision and Order.
- Complainant’s Evidence. Complainant opined that the TVM of each of the subject properties as of January 1, 2017, was:
| Property | Parcel/Locator No. | Complainant’s Opinion of TVM |
| Appeal No. 17-10575 | 15J630699 | $76,000 – $80,000 |
| Appeal No. 17-10576 | 15J340244 | $30,000 |
To support his opinion of value, Complainant offered the following exhibits:
| Property | Parcel/Locator No. | Exhibit A |
| Appeal No. 17-10575 | 15J630699 | Grid comparing three comparables to subject property and calculating price per square foot; color photographs of portions of exterior and interior of each comparable |
| Appeal No. 17-10576 | 15J340244 | Settlement statement for Complainant’s purchase of the subject property for $25,000 and dated July 1, 2016; sales data for three comparable properties with photographs of exterior and interior of two of the comparables |
Respondent did not object to Complainant’s exhibits, all of which were admitted into the record.
Appeal No. 17-10575
In conjunction with the presentation of his exhibits, with regard to Appeal No. 17-10575, Complainant testified that he had purchased the property in March 2014 for $42,500. Complainant testified that the subject property had been listed with a realtor and the sale had been publicly advertised. Complainant testified that the subject property was encumbered by a mortgage of approximately $40,000. Complainant testified that he had not listed the subject property for sale but that he was considering listing it for approximately $122,000 based on Respondent’s appraisal report. Complainant testified that he had not received offers to purchase the property. Complainant testified that the property had been appraised in the three years preceding the evidentiary hearing for the purpose of refinancing to remodel the home. Complainant testified that he had made improvements to the subject property between January 1, 2015, and January 1, 2017, including the installation of new windows, new air conditioning, and painting. Although Complainant’s Complaint for Review form and Exhibit A indicated an opinion that the TVM of the subject property was $76,000, Complainant opined that the TVM of the subject property was $80,000 as of January 1, 2017.
In Exhibit A, Complainant used a grid to compare three comparable properties to the subject property. The three comparables were located within .5 miles or less of the subject property. The comparables sold between January 2016 and February 2017. Two of the comparables were two-story homes; one of the comparables was a one-story home. All of the comparables had construction quality ratings of C, and four of the comparables had condition ratings of average. The actual age of the comparables was newer than the subject property, ranging from 66 years to 76 years. The total living area of the comparables ranged from 1,508 square feet to 1,844 square feet. All of the comparables had full basements and three bedrooms. Comparables Nos. 1, and 3 had one full bathroom and one half bathroom; Comparable No. 2 had two full bathrooms and one half bathroom. (Exhibit A) Comparable Nos. 2 and 3 had fireplaces. The grid did not show whether any of the comparables had a garage or a front porch or a stoop or a patio. All of the comparables had brick exteriors. (Exhibit A) Complainant did not make any market-based dollar adjustments to the sale prices of the comparables to account for any differences between them and the subject property; rather, Complainant calculated the price per square foot of the comparables and the subject property. Based upon the BOE’s valuation of the subject property at $107,800, the price per square foot was $70.18. Based upon the sale prices of the comparable properties, the price per square foot ranged from $40.67 to $59.10.
Appeal No. 17-10576
In conjunction with the presentation of his exhibits, with regard to Appeal No. 17-10576, Complainant testified that he had purchased the property in 2016 for $25,000. Complainant testified that the subject property had been listed with a realtor and the sale had been publicly advertised. Complainant testified that the subject property was not encumbered by a mortgage. Complainant testified that he had not listed the subject property for sale but that, if he were to list if for sale, he would list it for approximately $40,000 in its current condition. Complainant testified that he had not received offers to purchase the property. Complainant testified that the property had not been appraised in the three years preceding the evidentiary hearing. Complainant testified that he had made minor improvements to the subject property prior to January 1, 2017, including cleaning, painting, and repairing a water leak in the basement wall but that no major remodel had been done following his purchase of the subject property in 2016.
On cross examination, with regard to the subject property in Appeal No. 17-10575, Complainant testified that he did not research the buyers and sellers of the comparable properties and that he only researched sale prices. With regard to the subject property in Appeal No. 17-10576, Complainant testified that he did not research buyers and sellers of the comparables. Complainant testified that he considers himself a real estate investor and that he is renting the subject property.
- Respondent’s Evidence. With respect to Appeal No. 17-10575, Respondent advocated affirming the BOE’s determination of TVM, $107,800. With respect to Appeal No. 17-10576, Respondent advocated affirming the BOE’s determination of TVM, $53,900. To support his opinions of value, Respondent offered the following exhibits:
| Property | Parcel/Locator No. | Exhibit 1 |
| Appeal No. 17-10575 | 15J630699 | Appraisal Report of Missouri State Certified Residential Real Estate Appraiser Barry A. Hough concluding an opinion of TVM in the amount of $122,000 |
| Appeal No. 17-10576 | 15J340244 | Appraisal Report of Missouri State Certified Residential Real Estate Appraiser Barry A. Hough concluding an opinion of TVM in the amount of $54,000 |
Complainant did not object to Respondent’s exhibits, which were admitted into the record.
Barry A. Hough (the Appraiser) testified that he used the sales comparison method for determining an opinion of each subject property’s TVM.
Appeal No. 17-10575
The Appraiser testified that he did not inspect the interior of the subject property but that he viewed the photographs from the December 2013 MLS listing for the subject property. In the Appraiser’s report, the Appraiser noted that the prior sale of the subject property was an “as-is” REO (real estate owned) sale of a bank-owned property and was not a standard market transaction. The Appraiser also noted that Complainant had informed him that insulated replacement windows and new central air conditioning were installed and the home was repainted prior to January 1, 2017. (Exhibit 1)
According to the appraisal report, the Appraiser analyzed five comparable properties to form an opinion of the subject property’s TVM. (Exhibit 1) All five of the comparables were located within less than .30 miles of the subject property. The comparables sold between November 2015 and December 2016.[1] The sale prices of the comparables ranged between $100,000 and $162,000. (Exhibit 1) Three of the comparables had lots nearly equal in square footage to the subject property, 7,200 square feet. Four of the comparables were one-and-a-half story, like the subject property. All of the comparables had construction quality ratings of Q4, and four of the comparables had condition ratings of C4. The actual age of the comparables ranged from 76 years to 96 years. The gross living area of the comparables ranged from 1,200 square feet to 1,943 square feet, and the Appraiser made market-based dollar adjustments to account for more or less square footage than the subject property. Comparable Nos. 1, 2, and 5 had three bedrooms and one full bathroom, like the subject property, and the Appraiser made market-based dollar adjustments to account for more or fewer bedrooms or the inclusion of a half bathroom. (Exhibit 1) All of the comparables had basements; Comparable Nos. 3 and 4 had partially finished basements. All of the comparables except Comparable No. 3 had a two-car garage. All of the comparables had either a front porch or stoop and a patio. All of the comparables had one fireplace and masonry exteriors. (Exhibit 1) The adjusted sale prices of the comparables ranged from $109,500 to $139,500. (Exhibit 1) In the appraisal report, the Appraiser noted that he placed equal weight on the comparables. (Exhibit 1)
Appeal No. 17-10576
The Appraiser testified that the sale of the subject property in July 2016 was marketed as an “as-is” “investor special.” In his report, the Appraiser noted that the transaction was not a standard market transaction. (Exhibit 1) The Appraiser testified that he looks for standard transactions for comparables when performing an appraisal. The Appraiser testified that he viewed the interior and the exterior of the subject property during the appraisal process.
According to the appraisal report, the Appraiser analyzed three comparable properties to form an opinion of the subject property’s TVM. (Exhibit 1) All three of the comparables were located within less than .25 miles of the subject property. The comparables sold between September 2015 and January 2017. The sale prices of the comparables ranged between $54,500 and $64,000. (Exhibit 1) Two of the three comparables had lots equal in square footage to the subject property, 5,401 square feet. All of the comparables were cottage style, had construction quality ratings of Q5 and condition ratings of C4[2]. The actual age of the comparables ranged from 68 years to 75 years. The gross living area of the comparables ranged from 900 square feet to 910 square feet, and all of them had two bedrooms and one bathroom. All of the comparables had basements; Comparable Nos. 2 and 3 had partially-finished basements. All of the comparables had a one-car garage and either a front porch or a patio. All of the comparables had one fireplace and masonry exteriors. (Exhibit 1) The adjusted sale prices of the comparables ranged from $53,913 to $56,000. (Exhibit 1) In the appraisal report, the Appraiser noted that he placed the most weight on Comparable Nos. 1 and 2 because of their similarity and immediate proximity to the subject property. (Exhibit 1) The adjusted sale prices of Comparable Nos. 1 and 2 were $54,000 and $53,913, respectively. (Exhibit 1)
- Presumption of Correct Assessment Not Rebutted. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the TVM of the subject properties to be between $76,000 and $80,000 and $30,000, respectively, as of January 1, 2017.
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
The STC has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement. The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the BOE, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
Basis of Assessment
The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Investigation by Hearing Officer
In order to investigate appeals filed with the STC, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification, or assessment of the property. Section 138.430.2 RSMo (2000) as amended. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties. Id.
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE. As will be addressed below in the section describing Respondent’s Burden of Proof, there exists by statutory mandate a presumption that the assessor’s original valuation was made by a computer, computer-assisted method, or a computer program – this is known as the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways.
The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then it also would be applicable to the Respondent.
The computer-assisted presumption only comes into play if the BOE lowered the value of the assessor and Respondent is seeking to to return to the original assessment and it has not been shown that the assessor’s valuation was not the result of a computer-assisted method. The BOE’s valuation is assumed to be an independent valuation. The computer-assisted presumption can only come into play in those instances where Respondent is seeking to have the valuation of the subject property returned to the assessor’s original valuation. If in a given appeal the Respondent is offering evidence that would establish a value less than the original valuation, then the computer-assisted presumption is not applicable to that appeal. Even if the BOE has reduced the valuation and Respondent’s evidence is offered to increase the value, but not to the level of the original valuation, the computer-assisted presumption does not apply.
With regard to Appeal No. 17-10575, the BOE sustained Respondent’s original valuation, and Complainant advocated that the BOE’s valuation was incorrect. Respondent advocated that the BOE’s valuation should be sustained and presented evidence to support the BOE’s determination of TVM. Therefore, in order to prevail, Complainant must rebut that presumption by substantial and persuasive evidence that the value concluded by the BOE is in error and must establish what the correct value should be. The computer-assisted presumption plays no role in this process.
In Appeal No. 17-10576, the BOE lowered Respondent’s initial valuation, and Complainant advocated that the BOE’s valuation was incorrect. Respondent advocated that the BOE’s valuation should be sustained and presented evidence to support the BOE’s determination of TVM. Therefore, in order to prevail, Complainant must rebut that presumption by substantial and persuasive evidence that the value concluded by the BOE is in error and must establish what the correct value should be. The computer-assisted presumption plays no role in this process.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.” Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993). “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.” Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).
There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.” Westwood Partnership, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. W.D. 1991).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783. A taxpayer does not meet his burden if evidence on any essential element of his case leaves the STC “in the nebulous twilight of speculation, conjecture and surmise.” See Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. E.D. 1980).
Respondent’s Burden of Proof
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the BOE, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Inc., 564 S.W.2d at 895; Cupples-Hesse, 329 S.W.2d at 702; Brooks, 527 S.W.2d at 53.
In this case, though not required, Respondent presented substantial and persuasive evidence rebutting the presumption of correct assessment by the BOE. Respondent presented the appraisal reports of the Appraiser and his testimony as evidence establishing higher valuations for each of the subject properties than the values finally determined by the BOE. However, because Respondent advocated affirming the BOE’s determinations of TVM, Respondent’s evidence was considerd to be support for upholding the BOE’s valuations and not to increase the valuations (see below).
Evidence of Increase in Value
In any case in charter counties or the City of St. Louis where the assessor presents evidence that indicates a valuation higher than the value finally determined by the assessor or the value determined by the BOE, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining either the assessor’s or board’s valuation and not for increasing the valuation of the property under appeal. Section 138.060 RSMo (2000) as amended.
Respondent presented the testimony and appraisal report of the Appraiser in an effort to rebut the presumption of correct assessment by the BOE and to establish the fair market value of the properties under appeal, as of January 1, 2017, to be $122,000 and $54,000. However, the assessed values cannot be increased above the assessor’s initial valuations of $107,800 and $57,000 in these particular appeals. See Section 138.060; State ex rel. Ashby Road Partners, LLC et al. v. STC and Muehlheausler, 297 S.W.3d 80, 87-88 (Mo. banc 2009).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
The Hearing Officer, as the trier of fact, may consider the testimony of an expert witness and give it as much weight and credit as deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
Respondent presented the expert testimony of the Appraiser.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission. It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case. See, Nance v. STC, 18 S.W.3d 611, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). Missouri courts have approved the comparable sales or market approach, the cost approach, and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347.
“Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.
Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; see also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary.
Discussion
In this case, while Complainant’s evidence was substantial, it was not persuasive to rebut the presumption of correct assessment by the BOE when weighed against Respondent’s evidence. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702.
Although Complainant presented evidence of comparable sales, Complainant did not make any market-based dollar adjustments to the comparables to account for differences between the comparables and the subject property. More importantly, the evidence was unclear as to whether the sales involving Complainant’s comparables were arm’s-length transactions or non-market sales. However, it should be noted that the BOE reduced the TVM of the subject property in Appeal No. 17-10576, presumably after considering Complainant’s evidence of the purchase price he paid for the property in July 2016, six months prior to the relevant tax date. The totality of the evidence further established that the subject properties had been purchased as investments at below-market prices. Consequently, one cannot reasonably conclude that the subject properties should be valued at between $70,000 and $80,000 and $30,000, respectively.
Although not required, Respondent presented substantial and persuasive evidence rebutting the presumption of correct assessment by the BOE in 17-10575 and supporting the presumption in 17-10576. Respondent presented the appraisal reports of the Appraiser, Exhibit 1 (17-10575) and Exhibit 1 (17-10576), and the Appraiser’s testimony as evidence indicating higher valuations than the values finally determined by the BOE. The Appraiser utilized the sales comparison method to make market-based dollar adjustments to the comparables. Significantly, the sales of the comparables were arm’s-length transactions and not investor-driven transactions. From this evidence, one can reasonably conclude that the sale prices and the adjusted sale prices were reflective of the market as of January 1, 2017.
ORDER
The TVM for the subject property as determined by the BOE is AFFIRMED as set forth in the table below:
| Appeal No. | Parcel/Locator No. | BOE’s TVM | Assessed Value (19% of TVM) |
| 17-10575 | 15J630699 | $107,800 | $20,482 |
| 17-10576 | 15J340244 | $53,900 | $10,241 |
Application for Review
A party may file with the STC an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo
Disputed Taxes
The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED July 3rd, 2018.
STATE TAX COMMISSION OF MISSOURI
Amy S. Westermann
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 3rd day of July, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator
[1] The Appraiser noted that previous sales of two comparables used in his report, Comparable Nos. 3 and 4, involved real estate investment companies and were not standard market transactions. (Exhibit 1) However, the sales used in the Appraiser’s sales comparison analysis were not these sales and were arm’s length transactions. (Exhibit 1)
[2] In Exhibit 1, the Appraiser noted that Comparable Nos. 1 and 3 had kitchens of a quality and condition superior to that of the subject property, so a negative market based adjustment of $5,000 was made to those comparables. (Exhibit 1)