STATE TAX COMMISSION OF MISSOURI
| KURT HARTNER TRUST | ) | |
| ) | ||
| Complainant | ) | |
| ) | ||
| v. | ) | Appeal No. 17-30014 |
| ) | ||
| ROBERT MURPHY, ASSESSOR | ) | |
| JACKSON COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent | ) |
DECISION AND ORDER
HOLDING
Decision of the Jackson County Board of Equalization (BOE) is AFFIRMED. The Kurt Hartner Trust (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
True value in money (TVM) for the subject property for tax year 2017 set at $879,750, residential assessed value of $167,150.
Complainant appeared by attorney Brynne Brown.
Robert Murphy, Assessor of Jackson County, Missouri (Respondent) appeared by attorney Whitney Miller.
Case heard and decided by Senior Hearing Officer John Treu (Hearing Officer).
ISSUE
Complainant appeals on the ground of overvaluation the decision of the BOE as to the TVM of the subject property. The State Tax Commission (STC) takes this appeal to determine the TVM for the subject property on January 1, 2017.
The Hearing Officer, having considered all of the competent evidence, upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the STC from the decision of the BOE.
- Evidentiary Hearing. The Evidentiary Hearing was held on November 15, 2017 at Jackson County Courthouse, Kansas City, Missouri.
- Identification of Subject Property. The subject property is identified by map parcel number or locator number 30-820-08-20-00-0-00-000. It is further identified as 200 W. 52nd Street, Kansas City, Missouri. (Ex. B & 1)
- Description of Subject Property. The subject property consists of a .55 acre tract of land improved by a custom built, 2-story, single family residential home, with 4,248 square feet of living area. The home was built in 2011 by Christy and Kurt Hartner. The cost to construct the home was $550,000. The land cost Complainant $215,000. The land was purchased from a realtor. Amenities include four bedrooms, four full bathrooms, one half bathroom, a fireplace, a 3-car attached garage and an in-ground pool. The cost of the in-ground pool was between $60,000 and $70,000. The total cost of the home, land, and pool were between $825,000 and $835,000. (Ex. B, Ex. 1, & Testimony)
- Assessment. The Assessor set a TVM for 2017 of $879,750. The BOE set a TVM of $879,750.
- Complainant’s Evidence. Complainant offered into evidence Exhibits A, B and C and the testimony of Christy Hartner. Exhibit A consisted of a property report from Realtors Property Resources. The Exhibit set forth a median home value for the zip code area as well as Kansas City, Jackson County, Missouri and the United States. Exhibit B consisted of Jackson County Assessors Information regarding the subject parcel. Exhibit C consisted of Jackson County Assessor Information regarding three other parcels which Complainant believed were comparable. The three “comparable” properties were valued by Respondent between $649,621 and $674,340 .
Exhibit A was objected to on the grounds of relevance. The objection was sustained. Exhibit B was received without objection. Exhibit C was objected to, the objection was overruled, and Exhibit C was received into the evidentiary record.
- Respondent’s Evidence. Respondent offered into evidence Exhibit 1. Exhibit 1 consisted of a BOE Support Report. The report estimated the TVM of the parcel using the sales comparison approach. Exhibit 1 was received without objection
- Presumption of Correct Assessment Not Rebutted. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE and establish the TVM as of January 1, 2017.
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 BOE, 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, 138.431.4, RSMo.
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 TVM for the property under appeal. By statute residential real property is assessed at 19% of TVM. Section 137.115.5, RSMo.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the 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 of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the BOE’s valuation is erroneous and what the TVM should have been placed on the property. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
Evidence must be both 1) substantial and 2) persuasive. 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).
Complainant’s Burden of Proof
In order to prevail, Complainant must present an opinion of TVM and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2017. Hermel, supra. There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal 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). A valuation which does not reflect the TVM of the property under appeal, is an unlawful, unfair and improper assessment.
Standard for Valuation
Section 137.115, RSMo, requires that property be assessed based upon its TVM 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). TVM 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 TVM of the subject property on the valuation date. Hermel, supra. TVM is the most probable price in terms of money which a property should bring in a 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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- 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.
Hearsay and Relevance
In evidentiary law there are two important and fundamental concepts relating to the admissibility of evidence, whether in testimonial or documentary form. Those two principles are hearsay and relevance. Either can be sufficient in various circumstances to exclude testimony or documents from coming into the evidentiary record.
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).
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, at 615 (Mo. App. W.D. 2000); Hermel, supra; 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. Div. 2 1974).
Cost to Construct
The improvement on the subject parcel was constructed by its current residents. The home was constructed in 2011. The total cost of construction was between $825,000 and $835,000. An in-ground pool was added to the parcel. The cost of the in-ground pool was between $60,000 and $70,000.
The cost to construct does not necessarily equal TVM in the market. Additionally, the improvements were constructed in 2011. The costs, due to the passage of time since construction, may not reflect the TVM of the property.
Complainant Fails to Prove TVM
The total cost of the home, land, and pool were between $825,000 and $835,000. Complainant failed to present substantial and persuasive evidence to establish a TVM as of January 1, 2017, for the subject property.
The BOE determination of TVM of $879,750 is sustained.
ORDER
The assessed valuation for the subject property as determined by the BOE for tax year 2017 is AFFIRMED.
The assessed value for the subject property for tax year 2017, is set at $167,150.
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 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, RSMo
Disputed Taxes
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, RSMo.
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 December 5, 2017.
STATE TAX COMMISSION OF MISSOURI
John Treu
Senior Hearing Officer
Certificate of Service
Delivery or Notice of the information contained in this Order was made via email or U.S. Postage on December 5, 2017, to the following:
Collector
assessment@jacksongov.org; WMiller2@jacksongov.org; rbeachy@vanosdolkc.com
Jacklyn Wood
Legal Coordinator