STATE TAX COMMISSION OF MISSOURI
|)||Appeal No. 21-30209|
|Complainant,||)||Parcel Locator No. 28-820-03-07-00-0-00-000|
|GAIL MCCANN BEATTY, ASSESSOR,||)|
|JACKSON COUNTY, MISSOURI,||)|
DECISION AND ORDER
Ladonia Williams (Complainant) appeals valuation of the subject property on January 1, 2021, of $21,000 as determined by Gail McCann Beatty, Assessor, Jackson County, Missouri (Respondent). Complainant did not appeal to the Jackson County Board of Equalization (BOE), but appealed directly to the State Tax Commission (STC) after purchase of the subject property for $9,000 at a tax sale in August 2021. Complainant claims the property is overvalued and proposes a value of $2,850. Complainant did not produce substantial and persuasive evidence establishing overvaluation. Respondent produced substantial and persuasive evidence establishing the initial valuation was incorrect. The Assessor’s decision is set aside, and the true value in money (TVM) on January 1, 2021, of the subject property is $9,000. Complainant appeared pro se. Respondent was represented by counsel, Jennifer Ware. The evidentiary hearing was conducted on July 6, 2022.
FINDINGS OF FACT
- Subject Property. The subject property is located at 2748 Raytown Rd, Jackson County, Missouri. The parcel/locator number is 28-820-03-07-00-0-00-000.
The subject property consists of an 870 square foot, single family home. The subject property is wood frame with stone foundation and features three bedrooms and one bathroom.
- Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2021, was $21,000. Complainant did not appeal to the Jackson County BOE, but appealed directly to the STC after purchase of the subject property at a tax sale for $9,000 in August 2021.
- Complainant’s Evidence. Complainant testified the TVM of the subject property on January 1, 2021, was $2,850. Complainant submitted Exhibit A, a report from the Kansas City Dangerous Buildings Section, which is admitted into evidence. Complainant testified the property’s value decreased dramatically due to a fire in May 2020 that damaged over 90% of the structure. (Exhibit A) Complainant testified that the property was damaged when she purchased the property, but she was unaware that the property was damaged when she placed her bid on the property at the tax sale. Complainant testified that due to the subject property’s current condition, the only course of action is to demolish the current structure and rebuild on the lot. (Exhibit A) Complainant testified the Jackson County Assessor’s office did reduce the value of the property for 2022 to $2,850. Complainant testified her opinion of value at $2,850 is based mainly on the Assessor’s office employee reducing the value of the property to $2,850. Complainant testified the cost to demolish the burned down structure would be between $11,000 and $15,000 based on bids she has received. Complainant testified she is not a licensed appraiser or a person possessing appraisal training. Complainant submitted no appraisal of the subject property.
- Respondent’s Evidence. Respondent submitted the testimony of David Davis and Exhibit 1, Support Report, which is admitted into evidence. Mr. Davis testified he has been a Residential Real Estate Appraiser for five years. In Exhibit 1, Mr. Davis utilized the sales comparison approach to estimate the January 1, 2021, market value of the subject property. Mr. Davis testified the fire caused permanent damage to the subject property and the valuation in Exhibit 1 is only for the land, not improvements. Mr. Davis concluded the market value was $9,000 in Exhibit 1. Mr. Davis testified he did not agree with the Assessor’s other employee’s conclusion about the 2022 opinion of value because there was no research done by that employee and the lot was valued by mass appraisal methods. Mr. Davis testified that the Jackson County’s 2021 Assessment for the subject property based on mass appraisal valuations were $18,150 for improvements and $2,850 for land. Mr. Davis testified that due to the sales comparison method utilized in Exhibit 1, $9,000 is the correct valuation for the subject property. Mr. Davis testified that in his opinion as an appraiser, the land without improvements is worth $9,000 and the Assessor’s prior valuation of $21,000 for 2021, should be decreased to $9,000.
- Value. The TVM of the subject property on January 1, 2021, was $9,000.
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 BOE’s valuation is presumptively correct. Rinehart v. Laclede Gas Co., 607 S.W.3d 220, 227 (Mo. App. W.D. 2020). To prove overvaluation, a taxpayer must rebut the BOE’s presumptively correct valuation and prove the “value that should have been placed on the property.” Snider, 156 S.W.3d at 346. The taxpayer’s evidence must be both “substantial and persuasive.” 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 testified the subject property’s value is $2,850. Complainant’s argument in support of this value is the permanent fire damage to the structure of the subject property and the Assessor’s agreement for 2022 that the land value is $2,850. Complainant’s submission of a report and testimony regarding condition is not a method used to find a TVM for a property. The comparable sales approach is the method used to determine the TVM of the subject 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.” Snider, 156 S.W.3d at 347-48 (internal quotation omitted). Complainant’s evidence does not make adjustments to comparable properties to find a proper appraisal comparison. While a property owner’s opinion of value is generally admissible, the opinion “is without probative value where it is shown to have been based upon improper elements or an improper foundation.” Shelby Cty. R-IV Sch. Dist. v. Herman, 392 S.W.2d 609, 613 (Mo. 1965); see also Cohen v. Bushmeyer, 251 S.W.3d 345, 349 (Mo. App. W.D. 2008) (noting a property owner’s opinion of value loses probative value when it rests on an improper foundation). Complainant presented no appraisal of the subject property in order to determine a value of the subject property. See Cohen, 251 S.W.3d at 349 (holding a landowner’s opinion of value lacks probative value when there is “no other evidence as to what he based his opinion on or how he arrived at his opinion of [value]”). Complainant’s alleged valuation is based on improper elements and therefore is speculative. Overall, the condition issues submitted by Complainant are not persuasive evidence to demonstrate how the value of the subject property is $2,850.
The assertions within Complainant’s testimony, which discuss Respondent’s agreement to the land valuation for 2022, are not substantial and persuasive evidence that the Assessor’s valuation of the subject property is erroneous for the year 2021. General assertions about the shortcomings of the methodology of Respondent and how such methodology causes variations in value do not speak specifically as to the TVM of the subject property.
Although not required given the burden of proof, Respondent presented Exhibit 1 and testimony that the data in Exhibit 1 supported Mr. Davis’ testimony and support report’s valuation of the subject property. Respondent’s evidence persuasively supports the TVM of $9,000.
CONCLUSION AND ORDER
The Respondent’s valuation is set aside. The TVM of the subject property as of January 1, 2021, was $9,000.
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 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.
SO ORDERED July 29, 2022.
STATE TAX COMMISSION OF MISSOURI
Erica M. Gage
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 July 29, 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 directly with the STC after purchasing the property at a sale on August 8, 2021. The deadline for appealing to the local BOE was the second Monday in July, which was July 12, 2021. Under 12 CSR 30-3.010(1)B.1, a property owner may appeal directly to the STC (a) where the assessor fails to notify the current owner of the property of an initial assessment or an increase in assessment from the previous year, prior to 30 days before the deadline for filing an appeal to the board of equalization, including instances in which real property was transferred and the prior owner was notified, or (b) where a new owner purchased real property less than 30 days before the deadline for filing an appeal to the BOE or later in the tax year, regardless if the assessment is an initial assessment, an increase or decrease in assessment, or an assessment established in the prior year. Appeals under either of these provisions must be filed within 30 days after a county official mailed a tax statement or otherwise first communicated the assessment or the amount of taxes to the owner or on or before December 31 of the tax year in question, whichever is later. Proof of late notice, the date of purchase, and/or notice sent to the prior owner shall be attached to, or set forth in, the complaint. The 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.