State Tax Commission of Missouri
LIBERTY ASSETS,LLC)
)
Complainant,)
)
v.) Appeal Number 11-32062
)
CATHY RINEHART, ASSESSOR,)
CLAY COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Clay County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2011 is set at $116,400, residential assessed value of $22,120, as proposed by Respondent.
Complainant appeared by Counsel, Luke A. Demaree.
Respondent appeared by Counsel, Patricia Hughes, Assistant County Counselor.
Case heard and decided by Senior Hearing Officer Luann Johnson.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011, and January 1, 2012.
SUMMARY
Complainant appeals, on the ground of valuation, the decision of the Clay County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $364,000 (assessed value of $69,160, as residential property).Complainant proposed a value of $72,800 (assessed value of $13,830).A hearing was conducted on April 25, 2012, at the Clay County Administration Building, Liberty, Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant’s Evidence
Exhibit 1Appraisal report of Peter D. Burgess, MAI
Respondent’s Evidence
Exhibit AAppraisal report of Mika Koyama
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from a tax sale held on the fourth Monday in August, 2011.
2.The subject property is a 10.4 acre vacant parcel located at US Highway 169 and N.W. 108th Street, Kansas City, Missouri.The property is identified by parcel number 09-808-00-13-005.00.
3.The property is irregularly shaped with 605 front footage on US Highway 169.The site is preliminarily platted for 31 residential home sites.Some ground clearing and rough grading has been made to the site although there is a mound of soil left on the property from the adjoining commercial development site.All utilities are available and can be readily extended from existing lines from adjoining properties within the previous phase of development.
Although a portion of the tract is within a 100 year flood plain, the plat has been developed in such a way as to accommodate this issue.And, because a plat exists, Kansas City’s “Stream Setback Ordinance” is not currently applicable and will not impact the property at all if the final plat is filed by February 14, 2014.[1]
4.The subject site is a part of Bristol Park residential development.The residential subdivision started in the early 2000s.Home sales in this neighborhood are relatively stable in comparison to the regional market trends.Nearly 30% of new home sales in Clay County between 2009 and 2010 occurred within subject’s 5-mile range.Staley High School is one of the main contributing factors to the area’s favorable housing market.Staley High School was opened in the fall of 2008, and is considered the premier High School in the North Kansas City School District.The subject property is located only two miles east of Staley High School.
The economic outlook for the subject’s neighborhood is good.Population in the area is growing.Based upon the area’s economic analysis, it is anticipated that the subject’s neighborhood may grow faster than other parts of the Kansas City Metropolitan area, resulting in increased demands for vacant land within the foreseeable future. [2]
5.The highest and best use of the subject property is for residential development.[3]
6.A sales comparison approach is a reliable method of determining value for the subject property.[4]
Complainant’s appraiser presented three proposed comparable sales.One of said sales was bank owned, suggesting it may have been a foreclosure sale.Two of said sales were located in Smithville, a town several miles north of the subject property.The third parcel, most similar to the subject in size and location, sold for $23,100 per acre.After adjustments, and factoring in the lower sales prices of the Smithville properties, Complainant’s appraiser determined the subject property to have a value of $9,278 per acre or $96,491 for the parcel.However, Complainant’s appraiser then decided to give the greatest weight to the Smithville parcels rather than the nearby Kansas City parcel and proposed a value of $7,000 per acre or $72,800.[5]
Respondent’s appraiser utilized three sales with the boundaries of the city of Kansas City, like the subject property.Her comparables indicated a range of value of the subject between $15,941 and $16,520.Based upon these sales, she proposed a value for the subject property of $16,000 per acre of $166,400.[6]
Respondent’s comparable sales, including one within the same school district, are most similar to the subject property in terms of size and location.Consequently, Respondent’s appraiser’s sales provide a better indicator of value for the subject property than Complainant’s appraiser’s proposed comparable sales.
7.Complainant’s evidence was not substantial and persuasive to establish the true value in money as of January 1, 2011, to be $72,800 as proposed.However, Respondent’s evidence was sufficient to rebut the presumption in favor of the Board’s value and establish the market value for the subject property for tax years 2011 and 2012 at $166,400.
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]
Official and Judicial Notice
Agencies shall take official notice of all matters of which the courts take judicial notice.[8]
Courts will take judicial notice of their own records in the same cases.[9]In addition, courts may take judicial notice of records in earlier cases when justice requires[10] or when it is necessary for a full understanding of the instant appeal.[11] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[12]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[13]
The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.
The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, 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.[14]
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.[15]It is the fair market value of the subject property on the valuation date.[16]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.[17]
Duty to Investigate
In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to 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.The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.[18]
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.[19]
Trier of Fact
The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.[20]
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.[21]
Missouricourts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[22]
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.[23]
Respondent’s Burden of Proof
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.[24]
Complainant’s 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.[25]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.”[26]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[27]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.[28]
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Clay County for the subject tax day is SET ASIDE.
The market value for the subject property on January 1, 2011, and January 1, 2012, is set at $166,400.The assessed value for the subject property for tax years 2011 and 2012 is $22,110.
A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing date shown in the Certificate of Service.The application shall contain specific 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 appeal is based will result in summary denial. [29]
The Collector of Clay County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 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 May 21, 2012.
STATE TAX COMMISSION OFMISSOURI
_____________________________________
Luann Johnson
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 21st day of May, 2012, to:Luke A. Demaree, 200 NW Englewood Road, Suite B, Kansas City, MO64118, Attorney for Complainant; Patricia Hughes, Assistant County Counselor, 17 W. Kansas, Suite 3, Attorney for Respondent; Cathy Rinehart, Assessor, Sheri Chapman, Clerk, Lydia McEvoy, Collector, Administration Building, 1 Courthouse Square, Liberty, MO 64068.
___________________________
Barbara Heller
Legal Coordinator
[3] Ex. A, pg. 23.Note that Complainant’s appraiser suggests that the highest and best use would be for “speculative holding”.“Speculative holding” is not a recognized class in Missouri.Property not classified as residential would go into class three and is assessed at 32% of market value, rather than 19% as residential.
[9] State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898).
[10] – Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929)
[11] State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956).
[12] In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).
[13] 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).