State Tax Commission of Missouri
KOHL’S DEPARTMENT STORE, #1118,)
)
Complainant,)
)
v.)Appeal No.09-52007
)
CHRISTOPHER ESTES, ASSESSOR,)
COLE COUNTY, MISSOURI,)
)
Respondent.)
ORDER
DENYING APPLICATION FOR REVIEW
AFFIRMING HEARING OFFICER DECISION
On June 13, 2012, Hearing Officer Maureen Monaghan entered her Decision and Order (Decision) affirming the assessment by the County Board of Equalization and denying Complainant’s claim of overvaluation.
On July 16, 2012, Complainant filed its Application for Review of the Decision.On July 16, 2012, Respondent filed a Motion to Dismiss Complainant’s application as filed out of time.
ORDER
The Commission grants the Motion of the Respondent.Complainant’s Application was due on Friday, July 13, 2012.Complainant electronically filed his application and certified serving said application on July 16, 2012.Collector has released the escrowed funds.
Application for Review is hereby DENIED.
Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo.
SO ORDERED July 24, 2012.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Randy B. Holman, Commissioner
DECISION AND ORDER
HOLDING
Decision of the Cole County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.
Complainant appeared by Counsel, John L. Lentell, John L. Lentell LLC, Kansas City, Missouri.
Respondent appeared in person.
Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
Complainant appeals, on the ground of overvaluation, the decision of the Cole County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Cole County Board of Equalization.A hearing was conducted on May 15, 2012, at the Cole County Sheriff’s Department, Jefferson City, Missouri.
2.Assessment.The Assessor appraised the property at $1,002,669, a personal property assessment of $334,223.[1]The Board sustained the assessment.[2]
3.Subject Property.The subject property is located at Kohl’s Department Store # 1118, 715 Stoneridge Parkway, Jefferson City, Missouri.The property is identified by Assessor’s Account Number 11347.The subject property is generally described by the following categories: Compactors; Signs and Pylons; Stockroom Shelving; Conveyors; Free Standing Fixtures and Perimeters; Visuals; Graphic Art Displays; Computers and Office Equipment; Office Furniture; Point of Sale Systems; Dock Equipment; Selling Equipment; Telephone Equipment; Cleaning Equipment; Security Equipment; and Radio Frequency Equipment.
4.Complainant’s Evidence.Complainant submitted the following exhibits which were received into evidence:
|
EXHIBIT |
DESCRIPTION |
|
A |
Retrospective Valuation – Douglas R. Krieser, ASA, FRICS |
|
B |
Fixture Checklist |
|
C |
Fixture Analysis |
|
D |
Fixture Percent to RCN Analysis |
|
E |
Fixture Economic Obsolescence Total |
|
F |
Fixture RCN Adjustments for 2005 & 2007 |
|
G |
Non-Fixture Obsolescence Factors |
|
H |
Compilation of Minors |
|
I |
Sample Cost & Market Data |
|
J |
Floor Plans |
|
K |
Written Direct Testimony of Mr. Krieser |
Mr. Krieser testified at the evidentiary hearing.
The Complainant also moved for judicial notice of appeal number 09-10143, Kohl’s Department Store #1192 (hereinafter referred to as Ellisville) v. Zimmerman, wherein the decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor was set aside and the hearing officer found that the true value in money for the subject property for tax year 2009 was $737,140, business personal property (machinery, tools and equipment) assessed value of $245,710.
5.Respondent’s Evidence.Respondent submitted the following exhibits which were received into evidence:
|
EXHIBIT |
DESCRIPTION |
|
1 |
Personal Property Report |
|
2 |
Written Direct Testimony of Judith Trail |
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
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.[3]
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.[4]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[5]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.
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.[6]True value in money is defined in terms of value in exchange and not value in use.[7]It is the fair market value of the subject property on the valuation date
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.[8]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.[9]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[10]It places the burden of going forward with evidence on the taxpayer – Complainant.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.[11]
Section 137.122, RSMo – Assessor’s Valuation and Presumption of Correctness
Section 137.122 provides the statutory procedure for the Assessor to determine the assessed value of depreciable tangible personal property (business personal property).
It states:
“2. To establish uniformity in the assessment of depreciable tangible personal property, each assessor shall use the standardized schedule of depreciation in this section to determine the assessed valuation of depreciable tangible personal property for the purpose of estimating the value of such property subject to taxation under this chapter.”
The statute specifies the methodology for the assessor’s valuation of property such as the property that is the subject of this appeal.
It provides in relevant part:
“3. For purposes of this section, and to estimate the value of depreciable tangible personal property for mass appraisal purposes, each assessor shall value depreciable tangible personal property by applying the class life and recovery period to the original cost of the property according to the following depreciation schedule.”
Assessor’s Account Number 11347 (Complainant’s personal property account) was established for the January 1, 2008, assessment.The Complainant filed a personal property declaration listing under the 5 year recovery period, the original cost of property purchased in 2007 as $134,012 and listing under the 7 year recovery period, the original cost of property purchased in 2007 as $1,803,046[12].The declaration requests that a list of assets be provided.The Complainant did not provide such list.
The Complainant filed a personal property declaration in 2009 listing under the 5 year recovery period, the original cost of property purchased in 2007 as $111,957 and property purchased in 2008 $1727.The Complainant’s declaration also listed property under the 7 year recovery period; the original cost of property purchased in 2007 as $1,301,669 and property purchased in 2008 as $25,683[13].The declaration requests that a list of assets be provided.Once again, the Complainant did not provide such list.
The Assessor accepted the personal property declaration and followed the valuation procedures as set forth in Section 137.122, RSMo.The Assessor used the recovery periods declared by the Complainant and the depreciation schedule set forth in the statute.Complainant does not allege that the Assessor failed to fully comply with Section 137.122, RSMo.
Section 137.122, RSMo creates a rebuttable presumption that a value determined under the statute is correct.
It states:
“4. Such estimate of value determined under this section shall be presumed to be correct for the purpose of determining the true value in money of the depreciable tangible personal property, but such estimation may be disproved by substantial and persuasive evidence of the true value in money under any method determined by the state tax commission to be correct, including, but not limited to, an appraisal of the tangible personal property specifically utilizing generally accepted appraisal techniques, and contained in a narrative appraisal report in accordance with the Uniform Standards of Professional Appraisal Practice or by proof of economic or functional obsolescence or evidence of excessive physical deterioration.”
The Assessor’s valuation therefore is presumed correct.
Complainant’s Evidence
Complainant presented the testimony of Douglas Krieser.Mr. Krieser is a Fellow of the Royal Institution of Chartered Surveyors and an Accredited Senior Appraiser of the American Society of Appraisers.He was hired to provide an opinion of value of the personal property of the Complainant found in Cole County on January 1, 2009, for ad valorem purposes.
Mr. Krieser testified that a unique aspect of this appraisal was that the valuation date of the assets was three years prior to the physical inspection date, i.e. the valuation date is
January 1, 2009, but the appraiser did not attempt to do any inspection until 2012.Even in 2012, Mr. Krieser did not attempt an inventory of the assets in Cole County. Mr. Krieser stated that performing a complete inventory as of the inspection date would not produce a reasonable inventory as of the valuation date. Due to the inspection being three years after the valuation date, Mr. Krieser used the inventory and records of another store (Ellisville) as a proxy[14] for the subject property.He also used an estimate of what type of assets might be found in a “typical” Kohl’s store.
The assets had three general categories: fixtures, non-fixtures and minors.Mr. Krieser reviewed information provided by Complainant for different types of fixtures located at typical stores built in 2005, 2007 and 2008.Out of the 369 groupings of fixtures, appraiser only inventoried 2 of the groupings at the Jefferson City store.[15]
The appraiser had a detailed listing of assets that were non-fixtures.There were 154 grouping of items.Ninety items were verified on the inspection that took place 3 years later.Items were categorized as:
“Verified on site, not the same as Ellisville but very similar, FMV would be the same
Verified on site – different than Ellisville
Appear to be newer, used Ellisville data
Assumed was in place at Jefferson City, none seen at Jefferson City
Verified on Site
Did not Inventory, used Ellisville
Could not verify change, used Ellisville”
There were also items categorized as “minor.”The items included sign holders, shelving, brackets, peg hoods, hang rails, etc.Mr. Krieser stated that it would be difficult to accurately inventory these type of assets as they are too small, too numerous, and easily damaged or lost.Due to the difficulty of inventorying these items, he used data provided for a typical modern store of similar size as the subject.He assumed that the list materially represented an inventory of the items which should be located at the subject store.
The inventory of personal property is the Complainant’s responsibility.The assessor requested a personal property list in 2008 and 2009.The Complainant did not comply with the request.The Complainant appealed the valuation in 2009 but still did not inventory the items.
Use of proxy store or using a “typical store” may be an acceptable methodology to estimate the inventory of a store three years after the valuation date but it does not rise to the level of substantial and persuasive evidence to rebut the presumption of correct assessment by the assessor. Further, it is reasonable for the assessor to rely on the sworn statement of the Complainant that the list provided on or about March 30, 2009, was a “true and correct statement of all the tangible personal property…on the first day of January, 2009”.[16]
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Cole County for the subject tax day is AFFIRMED.
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.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, MO65102-0146, 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. [17]
Disputed Taxes
The Collector of Cole 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.If no Application for Review is filed with the Commission within thirty days of the mailing date set forth in the Certificate of Service, the Collector, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.
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 June 13, 2012.
STATE TAX COMMISSION OFMISSOURI
Maureen Monaghan
Hearing Officer
[1] Personal property is assessed at 33 and 1/3 % of true value in money (fair market value), Section 137.115.1, RSMo
[6] 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).
[7] 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).
[8] See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).
[9] 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. Div. 2 1974).
[10] 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)