STATE TAX COMMISSION OF MISSOURI
|KENNETH & TRESSA LOVE||)||Appeal No. 19-30053 through 19-30056|
|)||Parcel/Locator Nos. (see table below)|
|GAIL MCCANN BEATTY, ASSESSOR,||)|
|JACKSON COUNTY, MISSOURI,||)|
DECISION AND ORDER
The decisions of the County Board of Equalization of Jackson County (BOE) independently valuing the subject property in this appeal at a true value in money (TVM) lower than the assessments made by Respondent are AFFIRMED. Kenneth and Tressa Love (Complainants) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
TVM for the subject properties for tax years 2019 and 2020 is set as follows:
Complainants appeared pro se.
Gail McCann Beatty, Assessor of Jackson County, Missouri (Respondent) appeared by attorney Tamika Logan.
Case heard and decided by Senior Hearing Officer John Treu (Hearing Officer).
Complainant appeals, on the ground of overvaluation, the decisions of the BOE, which lowered the valuation of the subject properties. The State Tax Commission (STC) takes these appeals to determine the TVM for the subject properties on January 1, 2019. The values as of January 1 of the odd numbered year remains the values as of January 1 of the following even numbered year unless there is new construction and improvement to the properties. 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
- Authority. Authority over these appeals is proper. Complainants timely appealed to the State Tax Commission from the decisions of the BOE.
- Evidentiary Hearing. The Evidentiary Hearing was held on June 25, 2020, at the Jackson County Courthouse, Kansas City, Missouri.
- Identification of Subject Property. The subject properties are identified by map parcel number or locator numbers and street addresses as follow:
|19-30053||34-340-10-01-02-0-00-000||17415 E. 41st Terrace South, Independence, MO|
|19-30054||34-340-07-25-00-0-00-000||4108 Crackerneck Road., Independence, MO|
|19-30055||34-340-10-04-00-0-00-000||4105 Crackerneck Road., Independence, MO|
|19-30056||34-340-01-49-00-0-00-000||17421 East 42nd Street, Independence, MO|
(Ex. A-D and Complaints for Review of Assessment)
- Description of Subject Property.
|19-30053||34-340-10-01-02-0-00-000||½ of a duplex, purchased as a foreclosure. Was built in 1980. In need of some repairs. Rented for $700/month. Vacant for 4 months in 2018.|
|19-30054||34-340-07-25-00-0-00-000||Duplex purchased as a foreclosure. In need of some repairs, including exterior repairs. Inside currently has bedbug problem. Rental property. One side currently not rented.|
|19-30055||34-340-10-04-00-0-00-000||Duplex purchased as a foreclosure. Was built in approximately 1980. In need of some repairs. Water leaks in basement with heavy rains. Rental property.|
|19-30056||34-340-01-49-00-0-00-000||Duplex purchased as a foreclosure. Was built in approximately 1980. In need of some repairs. Some noise problems due to fact property backs up to I-70. Rental Property. Vacant for a portion of 2019 due to evicted tenant.|
|Appeal||Assessor TVM/Assessed Value||BOE TVM/Assessed Value|
- Complainants’ Evidence. Complainants offered into evidence multiple photographs, which were in loose form and unmarked with exhibit designations. The photographs were not objected to. Complainants were granted leave to mail the exhibits, attached to 8 ½” x 11” paper, marked with exhibit letters, to the STC and to Respondent, by July 8, 2020. Complainants timely mailed such, including Exhibits A-D. Exhibit A consisted of photographs relating to appeal 19-30053 and a short description relating to the property. The photographs depicted damage to the property and its condition. Exhibit B consisted of photographs relating to appeal 19-30054 and a short description relating to the property. The photographs depicted damage to the property and its condition. Exhibit B also contained a matrix portal printout of the sales price of the duplex next door to the property the subject of appeal 19-30054. Such reflects the property next door sold for $100,000 on 10/4/2018 and was valued by Jackson County for $100,000 for the 2019 tax year. Exhibit C consisted of photographs relating to appeal 19-30055 and a short description relating to the property. The photographs depicted damage to the property and its condition. Exhibit D consisted of photographs relating to appeal 19-30056 and a short description relating to the property. The photographs depicted damage to the property and its condition.
- No Evidence of New Construction & Improvement. There was no evidence of new construction and/or improvements from January 1, 2019, to January 1, 2020, therefore the assessed value for 2019 remains the assessed value for 2020. Section 137.115.1.
- Respondent’s Evidence. Respondent offered no evidence.
- Presumption of Correct Assessment Not Rebutted. Complainants’ evidence was not substantial and persuasive to rebut the presumptions of correct assessment by the BOE and establish the TVM as of January 1, 2019. See, Presumption In Appeal, infra.
CONCLUSIONS OF LAW AND DECISION
STC Authority Over Ad Valorem Taxation Appeals
The STC has authority to hear this appeal and to correct any assessment that 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.
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. residential property at 19% of true value in money; commercial property at 32% 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 BOE. 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. The presumption is not evidence of value. 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).
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse, supra. 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, Complainants 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, 2019. 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); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991). A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.
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).
Respondent’s Burden of Proof
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, 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, Cupples-Hesse, Brooks, supra.
Standard for Valuation
Section 137.115 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.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, 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. 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. Section 138.430.2.
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).
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 he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part. St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
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 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 transaction and adjusts those prices to account for difference between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonable 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 interest;
- 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.
Complainants’ Other Referenced Properties
Complainants point to other properties and their sales prices and valuations. The Hearing Officer understands Complainants’ claim to essentially be an assertion of inequity in assessments, based upon the valuations of the other properties in close proximity to the subject property. Complainant offered no evidence of the average assessment ratio of the same class of property as the subject in Jackson County. The United States and Missouri constitutions prohibit discriminatory taxation of similarly situated taxpayers. See U.S. Const. amend. XIV; Mo Const. art. X, § 3. “A taxpayer has the right to have his assessment reduced to the percentage of that value at which others are taxed. . . .” Savage v. State Tax Comm’n of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986) (internal quotation omitted). Absent proof of intentional discrimination, the analysis of discrimination claims compares the assessment level of similarly situated properties to the actual assessment level for the subject property. Id. at 78.
There was no evidence of an intentional plan of discrimination or of the average or median assessment level of similarly situated residential properties in Jackson County. Furthermore, Complainants’ offered no evidence of the particular circumstances of the sales of the other properties, that the valuations of the other properties are correct, and a comparison between the subject properties and the other properties, making adjustment and corrections for the variables between such.
Complainants Fail to Prove Value
Complainants did not present substantial and persuasive evidence to rebut the BOE presumptions and establish the TVM of the subject properties, as of January 1, 2019. Complainants presented evidence that the subject properties are in need of multiple repairs. The evidence also established that the BOE reduced the TVM of all the subject properties. Complainants offered no evidence utilizing any of the accepted methods of valuation to establish the TVM of the subject properties, as of January 1, 2019. For the Hearing Officer to further lower the TVM of the subject properties from that established by the BOE would require the Hearing Officer to participate in speculation, conjecture and surmise that the BOE did not already factor in the repairs needed to the subject properties. Such would be improper. Complainants did not meet their burden of proof.
The assessed valuations for the subject properties as determined by the BOE for Jackson County for the subject tax day are AFFIRMED.
The assessed value for the subject properties for tax years 2019 and 2020 are set at:
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.
The Collector of Jackson 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.
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 31, 2020.
STATE TAX COMMISSION OF MISSOURI
John J. Treu
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 31st day of July, 2020, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Contact Information for State Tax Commission:
Missouri State Tax Commission
421 East Dunklin Street
P.O. Box 146
Jefferson City, MO 65102-0146
 All statutory citations are to RSMo. 2000, as amended.