State Tax Commission of Missouri
LARRY & ERLYS LEIN,)
)
Complainants,)
)
v.) Appeal No.11-32510
)
SCOTT SHIPMAN, ASSESSOR,)
ST. CHARLES COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Charles County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Complainants present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in money for the subject property for tax years 2011 and 2012 is set at $1,500, residential assessed value of $290.
Complainants appeared pro se.
Respondent appeared by Assistant County Counsel, Joseph W. Smith.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation, the decision of the St. Charles 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, 2011.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.Complainants timely appealed to the State Tax Commission from the decision of the St. Charles County Board of Equalization.A hearing was conducted on April 10, 2012, at the St. Charles County Administration Building, St. Charles, Missouri.
2.Subject Property.The subject property is identified by map parcel number 3-0015-4010-00-49, Assessor’s ID No. 492450A000.It is located on William Drive, St. Charles, Missouri.The subject parcel is an irregular shaped lot containing 2.25 acres according to county records.[1]Nearly the entire tract consists of a retention pond for surface water run-off from adjoining properties to the north, properties on Rose Drive, William Drive, and Donald Drive.There is a small portion of land along the east, south, west and part of the north sides of the property between the pond and the property boundary.There is not sufficient land around the pond to permit the construction of a home.[2]
The retention pond extends beyond the property boundary onto two properties which adjoin the subject on the southeast.Another small part of the pond extends to the north onto Complainant’s home site.The eastern half of the subject’s north property line forms the south boundary of Complainant’s home site on Rose drive.The pond suffers during the late spring into the fall of the year from a contamination of watermeal and other filament algae, which causes large portions of the surface of the pond to become covered with the green algae.The property was purchased by Complainants in 2001 for $1,500.
3.Assessment.The Assessor appraised the property at $10,000, an assessed residential value of $1,900.[3]The Board of Equalization sustained the assessment.[4]The property had been appraised from 2003 – 2006 at $1,500, its purchase price.The appraised value was increased in 2007 to $2,100 and that value remained on the property until 2011, when it was increased to $10,000.[5]
4.Complainants’ Evidence.Complainants testified in their own behalf.Mr. Lein’s opinion of value was the amount of $1,500 paid for the property in 2001.The following exhibits were received into the record on behalf of Complainants:
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EXHIBIT |
DESCRIPTION |
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A |
Complainant’s Statement |
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B |
Sales Grid and Maps |
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C |
Water Shed Maps |
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D |
|
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E |
Aerial Photographs |
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F |
Photographs |
5.Respondent’s Evidence.Tanya A. Fipps, appraiser for St. Charles County testified on behalf of Respondent.The following exhibits were received into the record on behalf of Respondent.:
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EXHIBIT |
DESCRIPTION |
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1 |
Qualifications of Tanya A. Fipps |
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2 |
Property Record Card – Subject |
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3 |
Regional/Neighborhood Maps |
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4 |
Area Map |
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5 |
Aerial Photograph |
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6 |
Photographs of Subject |
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7 |
Residential Lot Sales – 1/1/09 – 8/3/11 |
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8 |
1 Acre+ Lot Sales 09 – 11 |
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9 |
1 Acre+ Lot sales 7/10 – 6/11 by Lot Size |
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10 |
1 Acre+ Lot Sales 7/10 – 6/11 by Date |
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11 |
1 Acre+ Lot Sales 7/10 – 6/11 Price Data |
6.Property Valuation.The purchase price of $1,500 in 2001 established the value for the property.
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.[7]
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.[8]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.[9]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.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[10]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.[11]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.[12]The testimony of Mr. Lein, the maps and aerial photographs of the subject property constituted substantial and persuasive evidence to rebut the presumption of correct assessment and establish the value of $1,500.
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.[13]True value in money is defined in terms of value in exchange and not value in use.[14]It is the fair market value of the subject property on the valuation date.[15]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.
6.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.[16]
Complainants’ Burden of Proof
In order to prevail, Complainants 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, 2011.[17]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.”[18]A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[19]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.[20]
The opinion of value presented by Mr. Lein was the purchase price of $1,500 in 2001.The purchase was tied to the fact that Complainants home bordered the pond property.The property under appeal presents an unusual case.There is no similar property in St. Charles County that has sold since the Complainants’ purchase of the subject.Respondent’s appraiser concluded there was no market data upon which adjustments could be made to support a sales comparison approach to value.The lot sales data presented by Ms. Fipps, while very sound data for valuing an ordinary 2 – 3 acre residential lot, simply provide no basis to establish value for a lot existing as a retention pond.
It is an unusual circumstance when a 10 year old sale stands to establish value.The Hearing Officer’s decision should not be read as a precedent applicable to other residential lots or improved tracts.In ordinary circumstances where the property to be valued was a vacant residential lot suitable for building, such a sale would not establish value due to the fact that recent market data would provide sufficient evidence upon which to establish an appropriate value.However, this instance is beyond ordinary circumstances.The only relevant sale which the Hearing Officer has in the record for a retention pond lot is the 2001 purchase of the subject by the taxpayers.
The price of $1,500 was what a willing buyer and seller, both fully informed and acting in their own best interest at the time, determined was the property’s fair market value.[21] There is no evidence that on January 1, 2011, a fully informed buyer, acting in the buyer’s best interest would pay any amount greater than $1,500.While the $1,500 sale price might appropriately be trended upward based on the change in value from 2001 to 2011 in residential property in St. Charles county based on valid sales data of similar size residential lots, such evidence is not in the record for the Hearing Officer to consider.
The Hearing Officer concludes value as of January 1, 2011, to be what was originally paid for the lot in 2001 – $1,500.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Charles County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2011 and 2012 is set at $290.
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, 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. [22]
Disputed Taxes
The Collector of St. Charles 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 June 13, 2012.
STATE TAX COMMISSION OFMISSOURI
_____________________________________
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 13thday of June, 2012, to:Larry Lein, 12 Rose Drive, St. Charles, MO63304, Complainant; Joseph Smith, Assistant County Counselor, 100 North Third Street, Room 216, St. Charles, MO 63301, Attorney for Respondent; Scott Shipman, Assessor, 201 North Second, Room 247, St. Charles, MO 63301-2870; Ruth Miller, Registrar, 201 North Second Street, Room 529, St. Charles, MO 63301; Michelle McBride, Collector, 201 North Second Street, Room 134, St. Charles, MO 63301.
___________________________
Barbara Heller
Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
573-751-2414
573-751-1341 Fax
[3] Exhibit 2; Residential property is assessed at 19% of its appraised value (true value in money, fair market value). Section 137.115.5, RSMo
[6] Documents for prior tax years not received, upon Respondent’s objection as to relevance being sustained.
[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)
[11] 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.
[12] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[13] 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).
[14] 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).
[16] 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.
[18] 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).