STATE TAX COMMISSION OF MISSOURI
|Appeal No. 20-10320
Parcel/locator No(s): 28K120047
|JAKE ZIMMERMAN, ASSESSOR,
ST LOUIS COUNTY, MISSOURI,
DECISION AND ORDER
Kevin Brennan (Complainant) appeals the St. Louis County Assessor’s assessment finding the true value in money (TVM) of the subject property on January 1, 2020, was $271,700, with an assessed value of $51,620. Complainant purchased the property September 1, 2020, and appealed pursuant to 12 CSR 30-3.010(1)(B)1. Complainant claims the property is overvalued as assessed and proposes a value of $165,000. Complainant did not produce evidence establishing overvaluation. The 2020 assessment is affirmed.
Complainant, Kevin Brennan, was represented by counsel, Brian Mueller. Respondent was represented by counsel, Tim Bowe. The evidentiary hearing was conducted on September 29, 2021, via WebEx.
FINDINGS OF FACT
- Subject Property. The subject property is located at 4830 Dorsie Dr. in St Louis, Missouri. The parcel/locator number is 28K120047.
The subject property consists of a 21,340 square foot lot and a 1,875 square foot single family home. The home has six rooms, three bedrooms, and two bathrooms. Complainant purchased the subject property in 2020 for $165,000.
- Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $271,700. The property was purchased in September 1, 2020, by the Complainant for $165,000 and was appealed directly to the STC with a closing statement attached, applicable for property purchased within 30 days of the BOE deadline or after.
- Complainant’s Evidence. Complainant, Kevin Brennan, testified the TVM of the subject property on January 1, 2020, was $165,000. Complainant purchased the property on September 1, 2020. Complainant testified that he purchased the property from the son of the owner and it was not listed for sale. Complainant submitted the following exhibits:
|A||Pictures of the property on date of purchase||Admitted|
|B||Affidavit of Purchase||Admitted|
Complainant testified the subject property required extensive remodeling due to damage from mold to wit he received bids for kitchen, bathrooms, roof and patio, totaling $60,000. Complainant testified he is not an appraiser nor has he taken classes on making adjustments to properties for repairs.
- Respondent’s Evidence. Respondent presented testimony from Adam Luesse, St. Louis County Appraiser senior and submitted Exhibit 1, an appraisal. Exhibit 1 is the appraisal report determining the TVM of the subject property on January 1, 2020, was $275,000 and Mr. Luesse testified he made an additional $20,000 adjustment to the subject property to “fair minus” for its current condition. Mr. Luesse testified that he did not consider the sale to be reflective of market value due to the lack of the property being sold privately without being listed on the market.
Exhibit 1 utilizes the sales comparison approach to estimate the market value of the subject property from recent sales of four comparable properties to find a value of the subject property of $295,000. The four comparables are all within four tenths of a mile of the subject property and all sales in the year 2018.
The key property data in Exhibit 1 are as follows:
|Subject Property||11758 Roundhill Dr||4868 Dorsie||4831 Dorsie||11736 Roundhill|
The comparable properties are similar to the subject property with respect to size, design style, bedrooms and bathrooms and location. The comparable properties differ from the subject property with respect to condition, as all comparables were in fair or good condition and the subject property was fair minus condition.
- Value. The TVM of the subject property on January 1, 2020, was $271,700.
CONCLUSIONS OF LAW
- Assessment and Valuation
Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is 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. 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. For this reason, the comparable sales approach is typically used to value residential property. “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.
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). “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020). 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. 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.
- 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”). 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. 1980).
- Complainant Did Not Prove Overvaluation.
Complainant failed to prove overvaluation. Complainant offered the sales contract for $165,000 and condition photos of the property as the evidence supporting his alleged valuation. 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. Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character. 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. Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d, 341, 347 (Mo. 2005) (citations omitted). Complainant testified that the sale occurred without a market listing and he approached the seller, who was looking to sell the property. The evidence shows the Complainant’s purchase of the property is not an arms-length transaction. Complainant argues that the price paid is relevant in determining value for this property. However, “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.” Snider, 156 S.W.3d at 347-48 (internal quotation omitted). In contrast, Complainant used no comparable sales or appraisal of the property to arrive at a value. Complainant testified that the prior owner was offered an amount by a company and Complainant offered more in order to secure the property off-market. The nature of the sale constitutes peculiar circumstances, and therefore cannot be the basis for the subject property’s valuation as it is not reflective of a current market.
Respondent, although not required to, submitted Exhibit 1, an appraisal of the property. The comparable sales and adjustments utilized within Exhibit 1 support the January 1, 2019, assessment of $271,700. In a STC hearing, Respondent “shall not advocate nor present evidence advocating a valuation higher than that value finally determined by the assessor or the value determined by the BOE, whichever is higher, for that assessment period.” Section 138.060.1. If Respondent introduces “evidence indicating a higher value than the value finally determined by the assessor or the value determined by the board of equalization … such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.” 12 CSR 30-3.075(1).
Respondent’s Exhibit 1 concludes the market value of the subject property is higher than the value determined by the Respondent or the BOE. Respondent, however, did not advocate a value higher than that determined by the BOE. Exhibit 1 is admissible as evidence for sustaining the value assigned by the BOE. 12 CSR 30-3.075(1).
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2020, was $271,700, with an assessed value of $51,620.
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.
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 February 11, 2022.
STATE TAX COMMISSION OF MISSOURI
Erica M. Gage
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 February 11th, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
 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, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
 The appeal was initially assigned to Senior Hearing Officer Storck-Elam, who conducted an evidentiary hearing on the record but did not issue a decision and order. Pursuant to Section 138.431.5, “The commission may, prior to the decision being rendered, transfer to another hearing officer the proceedings on an appeal determination before a hearing officer.” Accordingly, this appeal is transferred to Senior Hearing Officer Erica Gage for determination.
 Missouri operates on a two-year reassessment cycle for valuing real property. See Section 137.115.1. Absent new construction or improvements to a parcel of real property, the assessed value as of January 1 of the odd year remains the assessed value as of January 1 of the following even year. Id.