State Tax Commission of Missouri
|v.||)||Appeal # 15-32802|
|SCOTT SHIPMAN, ASSESSOR||)|
|ST. CHARLES CO., MISSOURI,||)|
DECISION AND ORDER
Decision of the County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.
Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization regarding valuation, did not present substantial and persuasive evidence of misclassification and did not present substantial and persuasive evidence of discrimination. Complainant also failed to present substantial and persuasive evidence of overvaluation.
True value in money for the subject property for tax years 2015 and 2016 is set at $40,000, residential assessed value of $7,600.
Complainant appeared pro se.
Respondent appeared by attorney Amanda Jennings
Case heard and decided by Senior Hearing Officer John Treu.
Complainant appeals, on the ground of overvaluation, misclassification and discrimination, the decision of the St. Charles County Board of Equalization, which sustained the assessment of the subject property. The Commission takes this appeal to determine the assessed value for the subject property on January 1, 2015. The assessment as of January 1 of the odd numbered year remains the assessment as of January 1 of the following even numbered year unless there is new construction and improvement to the property. Section 137.115.1 RSMo
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 this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Charles County Board of Equalization.
- Evidentiary Hearing. The Evidentiary Hearing was held on April 14, 2016 at St. Charles County Administration Building, St. Charles, Missouri.
- Identification of Subject Property. The subject property is identified by map parcel number or locator number 4-0014-9385-00-0005 & T040100525. It is further identified as 2483 Bear Creek Drive, St. Charles County, Missouri. (Complaint for Review of Assessment)
- Description of Subject Property. The subject property consists of a vacant lot of .23 acres (Ex. A) Complainant plants winter wheat on such lot, but merely mows such down when mature. Complainant does not gather the winter wheat and does not sell such or process such for self use. (Testimony of Complainant)
- Assessment. The Assessor valued the property at $40,000, an assessed residential value of $7,600. The Board of Equalization sustained assessor’s valuation and classification (Complaint for Review of Assessment)
- Complainant’s Evidence. Complainant offered into evidence Exhibit A and Exhibit B. Exhibit A consisted of a picture and St. Charles County records relating to the subject property. Exhibit B consisted of a picture and St. Charles County records relating another property. Exhibit A was received into evidence without objection. Exhibit B was objected to, objection was sustained and the exhibit was excluded from the evidentiary record.
- No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2015, to January 1, 2016 therefore the assessed value for 2015 remains the assessed value for 2016. Section 137.115.1, RSMo.
- Respondent’s Evidence. Respondent did not submit any evidence.
- Presumption of Correct Assessment Not Rebutted. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2015, See, Presumption In Appeal, infra.
CONCLUSIONS OF LAW AND DECISION
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the Board of Equalization, 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 and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money and agricultural property at 12% of true value in money.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958). This presumption is a rebuttable rather than a conclusive presumption. It places the burden of going forward with some substantial evidence on the taxpayer – Complainant. When some substantial evidence is produced by the Complainant, “however slight”, which also is persuasive, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption. United Missouri Bank of Kansas City v. March, 650 S.W.2d 678, 680-81 (Mo. App. 1983), citing to State ex rel. Christian v. Lawry, 405 S.W.2d 729, 730 (Mo. App. 1966) and cases therein cited. The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact. 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).
Complainants’ Burden of Proof
In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2015. Hermel, supra. There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission 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.” See, 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.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value. Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970). The owner’s opinion is without probative value; however, where it is shown to have been based upon improper elements or an improper foundation. Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).
“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.” Carmel Energy at 783. A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “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. 1980).
Standard for Valuation
Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). True value in money is defined in terms of value in exchange and not value in use. Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
It is the fair market value of the subject property on the valuation date. Hermel, supra.
Market value is the most probable price in terms of money which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
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.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but 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).
Under Missouri statutory law, property shall be classified as agricultural and horticultural property when “real property [is] used for agricultural purposes and devoted primarily to the raising and harvesting of crops . . .” Section 137.016.1(2) RSMo. The classification is determined by the actual use put to the property. Northtown Village v. Don Davis, Assessor, Jasper County. Mo., Appeal Nos. 03-62558 (May 27, 2004)[ providing that the definitions in Section 137.016 (2000) illustrate that “the classification turns on the actual use put to the property.] Merriam Webster defines “harvest” as “the act or process of gathering in a crop”. Merriam Webster defines “crop” as “a (1): a plant or animal or plant or animal product that can be grown and harvested extensively for profit or subsistence <an apple crop> <a crop of wool> (2) : the total yearly production from a specified area b : the product or yield of something formed together”.
In the present appeal Complainant contends that the subject property should be classified as agricultural property. Complainant’s argument fails. Although Complainant plants winter wheat on the subject property, he merely mows down such winter wheat. He does not gather the wheat, thus Complainant does not harvest such. Additionally, Complainant does not grow such with the purpose for subsistence or to obtain a yield or for sale. Mowing is a common residential practice. Mowing of the winter wheat by Complainant does not convert such into an agricultural purpose. One must do more.
In Rinehart v. Bateman, 363 S.W.3d 357 (Mo. App. 2012)(affirmed by Bateman v. Rinehart, 391 S.W.3d 441 (Mo. banc 2013)) the Missouri Court of Appeals found that “the factual determination regarding whether a property’s actual use is for an “agricultural purpose” such that the property is “devoted primarily to the raising and harvesting of crops” will turn on the evidence in each case”. In such case, the taxpayer had an “agreement in place for future bailing” and the taxpayer testified that he had “sold the bales of hay”. Id. Additionally, the taxpayer “submitted into evidence photographs of the hay bailing operation, a copy of relevant advertisements placed in the newspaper, his bill for red clover, a copy of the check that he used to pay for soil testing, a copy of the soil test report, his agreements with [a person] to do the baling, copies of bills from [the other person], copies of checks paying the [other person] for the hay”. Id. In such case the operation was not profitable. No one factor is dispositive of an agricultural use. Instead, the totality of the circumstances must be looked at by the fact-finder, in this appeal, the Hearing Officer. Complainant did not prove by substantial and persuasive evidence an agricultural use.
Additionally, even in the event that Complainant could have shown that the subject property should be classified as agricultural, Complaint put on no evidence of the proper grading of such subject property to determine a productive value. The Hearing Office would have to participate in speculation and conjecture to make a finding.
In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property on January 1, 2015; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction. Koplar v. State Tax Commission, 321 S.W.2d 686, 690, 695 (Mo. 1959). Evidence of value and assessments of a few properties does not prove discrimination. Substantial evidence must show that all other property in the same class, generally, is actually undervalued. State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964). The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986). No other methodology is sufficient to establish discrimination. Cupples-Hesse, supra.
Complainant Fails To Prove Discrimination
Where there is a claim of discrimination based upon a lack of valuation consistency, Complainants have the burden to prove the level of assessment for the subject property in 2015. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.
Complainants must then prove the average level of assessment for residential property in St. Charles County for 2015. This is done by (a) independently determining the market value of a representative sample of residential properties in St. Charles County; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.
The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in St. Charles County must demonstrate a disparity that is grossly excessive. Savage, supra. Complainant’s discrimination claim fails because he failed to establish the market value of his property. Without establishing the market value, Complainant cannot establish his assessment ratio. Without establishing the ratio, Complainant cannot establish that he is being assessed at a higher percentage of market value that any other property.
However, even if Complainant had established his market value, his discrimination claim would still fail because he did not demonstrated that a statistically significant number of other properties within St. Charles County are being assessed at a lower ratio of market value than his property.
Because Complainant failed to establish the market value of his property and failed to establish that he is being assessed at a higher percentage of market value than a statistically significant number of other properties in St. Charles County, he failed to establish discrimination.
Complainant Fails to Proves Value
Complainant failed to present substantial and persuasive evidence to establish a fair market value as of January 1, 2015, for the subject property. His contention of misclassification lacked merit as did his contention of discrimination.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Charles County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2015 and 2016 is set at $7,600, residential.
Application for Review
A party may file with the Commission 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
The Collector of St. Charles 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 this 17th day of May, 2016.
STATE TAX COMMISSION OF MISSOURI
John J. Treu
Senior Hearing Officer
Delivery or Notice was made via mail, email, fax, or personally on May 17, 2016 to the following Individuals of this Order
Justin Schaper, 1711 Tabitite, Wentzville, MO 63385