STATE TAX COMMISSION OF MISSOURI
| Karen Smith, | ) | |
| ) | ||
| Complainant, | ) | Appeal No. 19-10986 |
| ) | ||
| v. | ) | Parcel No. 21K440205 |
| ) | ||
| Jake Zimmerman, Assessor, | ) | |
| St. Louis County, Missouri | ) | |
| Respondent. | ) |
DECISION AND ORDER
Karen Smith (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2019, was $211,700 with an assessed value of $40,220. Complainant claims the property is overvalued and proposes a value of $190,000 to $200,000. Complainant did not produce substantial and persuasive evidence establishing overvaluation. The BOE’s decision is affirmed.[1]
An evidentiary hearing was conducted remotely via Webex video on July 8, 2020. Complainant appeared pro se. Respondent was represented by counsel Monique McNutt.
FINDINGS OF FACT
- Subject Property. The subject property is located at 8930 Harrison in St. Louis, Missouri. The parcel/locator number is 21K440205.
The subject property consists of a lot and a 1,068 square foot brick home. The home has three bedrooms and one bathroom. Complainant testified that one of the three bedrooms is used as a television room, and she purchased the subject property for approximately $98,000 to $100,000 in 1990.
- Assessment and Valuation. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $211,700. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $211,700.
- Complainant’s Evidence. Complainant testified that she believes the TVM of the subject property on January 1, 2019, was around $190,000 to $200,000. Complainant submitted (1) Exhibit A, a three-page statement of Complainant’s key points; (2) Exhibit B, a three-page document that includes eight photographs of the subject property; and (3) Exhibit C, a one-page table of comparable properties prepared by Complainant. Respondent did not object to any of Complainant’s exhibits, and Exhibits A, B, and C were received into evidence.
Complainant testified that Exhibit A summarizes some of the key points she wanted to address during the hearing. Exhibit A includes three sections: (1) a summary of the property; (2) the methodology used to calculate property values; and (3) the process before the BOE. According to Complainant’s testimony and the first section of Exhibit A, only minimal updates have been made to the house, which include the installation of drain tiles to prevent flooding and the replacement of the HVAC, roof, driveway, kitchen cabinets, kitchen counter tops, and bathroom tile floor. According to Complainant’s testimony and the second section of Exhibit A, Complainant believes the methodology used by Respondent is neither reliable nor consistent. In support of these statements, Complainant’s testimony and the second section of Exhibit A discuss a 16% increase that exceeds the rate of inflation, assert inconsistent results in that other property owners who owned properties that have been upgraded received reductions in their valuations, and challenge the comparative properties that were selected by Respondent. Through testimony and the third section of Exhibit A, Complainant discusses the BOE process. Complainant specifically indicates that the BOE process was not followed because although she had been told that three BOE members would hear her appeal, only two did.
Exhibit B consists of photographs of the bathroom, combined living and dining room, kitchen, each of the three bedrooms, the basement, and the garage of the subject property.
Exhibit C includes a table of 16 properties placed in three groups. These groups are (1) seven properties Complainant proposes to use to appraise the subject property (proposed comparables); (2) six properties that Complainant indicates could be used to appraise the subject property (acceptable comparables); and (3) three properties that Complainant states Respondent utilized to appraise the subject property but are excluded from Complainant’s proposed comparables and acceptable comparables (excluded properties).
- Respondent’s Evidence. Respondent’s appraiser, Adam Luesse, testified that Respondent’s exhibits were offered to support the BOE value. Respondent submitted Exhibit 1, the Complaint for Review of Assessment and the attached October 4, 2019, BOE Findings and Notice of Decision, and Exhibit 2, a map showing the location of eight comparative properties followed by a second page titled “CMA[2] 1 Line (Landscape).” Complainant did not object to any of Respondent’s exhibits, and Exhibits 1 and 2 were received into evidence.
According to Mr. Luesse’s testimony and Exhibit 2, Exhibit 2 lists one-story homes located within one-quarter mile of the subject property with a square footage from 968 to 1168, which is within 100 feet of the size of the subject property, 1,068 square feet. These eight properties sold between January 1, 2017, and December 31, 2018. The sales range from $180,000 to $269,450 with a median of $231,750.
- Value. The TVM of the subject property on January 1, 2019, was $211,700 with an assessed value of $40,220.
CONCLUSIONS OF LAW
- Assessment and Valuation. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).
The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. “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 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.
- Evidence. The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012). 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.
- Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued or misclassified. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020). The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous” and must prove “the value that should have been placed on the property.” Id. “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage, 722 S.W.2d at 77 (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).
- Complainant Did Not Prove Overvaluation. Complainant does not produce substantial and persuasive evidence establishing that the BOE’s valuation is erroneous and that her opinion of value, $190,000 to $200,000, is the TVM of the subject property as of January 1, 2019. Although Exhibit C lists proposed comparables that are offered to support Complainant’s opinion of value, Complainant’s testimony and Exhibit C neither persuasively explain the exclusion of the excluded properties nor make adjustments for different characteristics between the proposed comparables and the subject property. For example, two of the excluded properties, 13 Stratford Lane and 9008 Bridgeport Avenue, are included in Respondent’s Exhibit 2 and appear to be comparable to the subject property. Based on the information contained in Exhibit C, both of these properties are a similar distance from the subject property as other properties included in the proposed comparables; have a total living area within 100 square feet of the total living area of the subject property; and have the same exterior wall type, architectural style, and number of full baths as the subject property. However, both properties are not included in Complainant’s proposed comparables or acceptable comparables. Further, the proposed comparables include two properties, 2414 Annalee Avenue and 9012 Moritz Avenue, with different exterior wall types than the subject property, aluminum/vinyl and asbestos, respectively. However, no adjustments are made to account for these different characteristics.
Further, although Exhibit B illustrates the condition of the inside of the home and garage at the time the photographs were taken, Exhibit B and Complainant’s related testimony neither establish that the BOE value is erroneous nor the TVM of the subject property as of January 1, 2019.
The second section of Exhibit A, which discusses Respondent’s methodology, and Complainant’s related testimony are not substantial and persuasive evidence that the BOE’s valuation of the subject property is erroneous. General assertions about the short-comings of the methodology of Respondent and how such methodology causes increases that exceed the rate of inflation and increases of some property values by 16% and 24% do not speak specifically as to the TVM of the subject property. Further, the fact that the appraised value of the subject property increased approximately 16% is not substantial and persuasive evidence that the BOE value is incorrect.
Likewise, the third section of Exhibit A, which discusses the BOE process, and Complainant’s related testimony are not substantial and persuasive evidence that the BOE value is erroneous. The evidence does not show that any failures to follow the proper process resulted in the overvaluation of the subject property. Further, as to Complainant’s assertion that only two out of three BOE members heard her appeal, pursuant to Section 138.040.2, a majority of the BOE members “present shall determine all matters of appeal or revision.”
Respondent, although not required to, presents persuasive evidence in support of the BOE’s valuation. Mr. Luesse’s testimony and Exhibit 2 explain that eight properties that sold between January 1, 2017, and December 31, 2018, with one-story homes located within one-quarter mile of the subject property that have a square footage from 968 to 1168 have a sales range from $180,000 to $269,450 with a median of $231,750. The TVM of the subject property determined by the BOE, $211,700, falls below the median and in the low end of this range and appears to take into account the fact that the subject property has minimal updates but is well maintained.
CONCLUSION AND ORDER
The BOE’s decision is affirmed. The TVM of the subject property as of January 1, 2019, was $211,700, with an assessed value of $40,220.
Application for Review
A party may file with the Commission an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person 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.
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.
SO ORDERED March 26, 2021.
Laura A. Storck-Elam
Senior Hearing Officer
State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. mail on March 26, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Elaina McKee
Legal Coordinator
[1] Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal. Mo. Const. art. X, sec. 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
[2] CMA is an acronym for comparative market analysis.