State Tax Commission of Missouri
KOHL’S DEPARTMENT STORES # 1192,)
v.) Appeal Number 09-10143
JAKE ZIMMERMAN, ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.
True value in money for the subject property for tax year 2009 is set at $737,140, business personal property (machinery, tools and equipment) assessed value of $245,710.
Complainant appeared by Counsel, John L. Lentell, John L. Lentell LLC, Kansas City, Missouri.
Respondent appeared by Associate County Counselor, Paula J. Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis 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 St. Louis County Board of Equalization.A hearing was conducted on April 12, 2011, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
3.Subject Property.The subject property is located at Kohl’s Department Store # 1192, 25 Ellisville Towne Center Dr., Ballwin, Missouri.The property is identified by Assessor’s Account Number B00228924.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.A detailed listing of all assets valued is found in Exhibit B and C to Exhibit A.Photographs of samples of categories of the assets is found in Exhibit D to Exhibit A.
4.Complainant’s Evidence.Complainant submitted the following exhibits which were received into evidence:
Fixture Percent to RCN Analysis
Fixture Economic Obsolescence Total
Fixture RCN Adjustments for 2005 & 2007
Non-Fixture Obsolescence Factors
Compilation of Minors
Sample Cost & Market Data
Ellisville Weighted Age Summary
Written Direct Testimony of Mr. Krieser
Exhibit A is an appraisal prepared in conformance with the Uniform Standards of Professional Appraisal Practice (USPAP).The report complies with the reporting requirements set forth under Standards Rule 8-2 (b) of USPAP for a Summary Appraisal Report.Exhibit A is an appraisal of the Complainant’s 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.
Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $737,140, personal property assessed value of $245,710.
Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the assessor under Section 137.122, RSMo and establish the true value in money as of January 1, 2009, to be $737,140, personal property assessed value of $245,710.
5.Respondent’s Evidence.Respondent did not file and exchange any exhibits or written direct testimony in the appeal.
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.
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.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.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.The only evidence on the record in this appeal on the issue of the fair market value of the property under appeal consists of the Krieser appraisal and written direct testimony of Mr. Krieser, Complainant’s expert witness.Accordingly, consistent with the constitutional mandate, the Hearing Officer must find the true value in money for the subject property based upon those sources.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.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”, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.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.Upon presentation of the Complainant’s evidence the presumption in this appeal disappeared.The case is decided free of the presumption.
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.True value in money is defined in terms of value in exchange and not value in use.It is the fair market value of the subject property on the valuation date.Market value is the most probable price in terms of money which a property should bring in 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:
1.Buyer and seller are typically motivated.
2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.
3.A reasonable time is allowed for exposure in the open market.
4.Payment is made in cash or its equivalent.
5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
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.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. Mr. Krieser, in performing his appraisal, considered the income approach but elected to not apply it in his valuation analysis.The valuation of the property under appeal was made relying on both the cost and market approaches.
Opinion Testimony by Experts
If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.
The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.
The present appeal called for the specialized knowledge of a witness qualified as an expert on the valuation of machinery, tools and equipment, i.e. business personal property.Mr. Krieser clearly qualified as an expert for this task.The data which provided the foundation for the conclusions and opinions of the appraiser were of a type reasonably relied upon by experts in appraising of machinery, tools and equipment and were otherwise deemed to be reliable. Accordingly, the conclusion of value reached by Mr. Krieser in his appraisal provided a sound evidentiary basis for a determination of the fair market value of the subject property.
Complainant Proves Value of $737,140
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, 2009.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.”
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.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.
Complainant’s appraisal report, the supporting exhibits, the written direct testimony and testimony at trial of Douglas Krieser provide the substantial and persuasive evidence required to rebut the presumption of correct assessment by the Board and prove value in this appeal.The value of the subject property as of January 1, 2009, was $737,140 as established by the Krieser appraisal.
Section 137.122, RSMo
Section 137.122 provides the statutory procedure for the Assessor to determine the assessed value of depreciable tangible personal property (business personal property).
“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.”
The methodology specified is for “mass appraisal purposes.”An appeal by an individual taxpayer of its own personal property is not an appeal which can address the mass appraisal of personal property.The appeal must address the true value in money of the property under appeal.The statutory methodology for the assessor’s mass appraisal is based upon the class life of property under the Modified Accelerated Cost Recovery System (MACRS) of the Internal Revenue Code and the recovery period allowed under the Internal Revenue Code.
Section 137.122 further creates a rebuttable presumption that a value determined under the statute is correct.
“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.”
Therefore, the statutory standard to rebut the presumption of a correct determination of true value in money (assessor’s presumption) is the same as that in an ordinary overvaluation case before the Commission there must be substantial and persuasive evidence.The present case is the case of first impression for the Commission under this statute.The Commission has not previously had opportunity to address through the evidentiary hearing and decision process the submission of evidence offered to rebut the assessor’s presumption.Exhibit A satisfies the statutory standard.See, FINDING OF FACT 4, supra.
For all of the reasons set forth above under FINDING OF FACT 4, Standard for Valuation, Methods of Valuation, Opinion Testimony by Experts, and Complainant Proves Value of $737,140 the assessor’s presumption has been rebutted and the true value in money of the subject property on January 1, 2009, has been established under the evidentiary standard established by Section 137.122 as $737,140.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2009 is set at $245,710.
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, 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. 
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 139.031.8, 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 July 19, 2011.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Senior Hearing Officer
 Personal property is assessed at 33 and 1/3 % of true value in money (fair market value), Section 137.115.1, RSMo
 Complaint for Review of assessment; BOE Decision Letter
 See, Exhibit A – Subject Assets Discussion, pp. 19 – 22
 Accredited Senior Appraiser of the American Society of Appraisers (See, Exhibit L, Q/A 7, 9, 10 & 11); Fellow of The Royal Institution of Chartered Surveyors (See, Exhibit L, Q/A 9, 12 & 13); Founder and President of Valcon Partners, Ltd
 Tr. 5:4 – 79:4
 Exhibit A – Transmittal Letter, Page 3; Certification, Page 1
 See, Section 137.122.4, RSMo – standard required for substantial and persuasive evidence to rebut presumption of correct determination of true value in money
 Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
 Article X, Sections 4(a) and 4(b), Mo. Const. of 1945
 Section 137.115.5, RSMo
 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)
 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.
 Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
 Exhibits A, B, C, D, E, F, G, H, I , J, K, L, and Testimony of Complainant’s Expert Witness at hearing
 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).
 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).
 Hermel, supra.
 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.
 Exhibit A – Definitions of Value and other Applicable Terms – Fair Market Value, p. 10; Exhibit L – Q/A 24.
 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).
 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).
 Exhibit A – V. Valuation Theory – Income Approach & Reconciliation of Valuation Approaches, p. 24; VII. Approaches to Value – Income Approach, p. 39; Exhibit L, Q/A 388, 389 & 390
 Exhibit A – V. Valuation Theory – Cost Approach, Market Approach & Reconciliation of Valuation Approaches, pp. 23 – 24; VII. Approaches to Value – Cost Approach, pp. 29 – 36; Market Approach, pp. 36 – 39; Exhibit L, Q/A 101, 102, & 103, 245, 246, 247, 391 & 392
 Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).
 Exhibit E – Statement of Qualifications – Douglas R. Krieser of Exhibit A; Exhibit L, Q/A 6 – 19.
 Exhibit L – Q/A: 56, 69, 78, 92, 93, 111, 112, 113, 115, 143, 144, 171, 187, 206, 207, 225, 234, 371, & 372; Exhibit A – I. Certification, Page 1
 Hermel, supra.
 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).
 See, Cupples-Hesse, supra.
 Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
 Exhibit A
 Exhibits B through K
 Exhibit L
 Tr. 5:1 – 79:3
 Over the course of hearing a number of business personal property appeals, the Hearing Officer has had occasion to have been presented a number of appraisals from various machinery and equipment appraisers. In general, all addressed their individual appraisal assignments in the same general manner and procedure employed by Mr. Krieser. However, none of the other appraisers provided the detailed analysis and explanation as tendered by Mr. Krieser. This is not to imply that the other appraisers had not provided substantial and persuasive evidence in a given appeal, it is only to observe that the Krieser appraisal and written direct testimony in its detail, analysis and supporting documentation provided a superior work product to any of the prior appraisals that had come before the Hearing Officer.
 Section 137.122.1 (2) – Definition of Class Life
 Section 137.122.1 (6) – Definition of Recovery Period
 Section 138.432, RSMo.