STATE TAX COMMISSION OF MISSOURI
|LIJUN WANG and XIAOLONG QIU,||)|
|v.||)||Appeal Nos. 17-10054|
|JAKE ZIMMERMAN, ASSESSOR||)||17-10059|
|ST. LOUIS COUNTY, MISSOURI,||)||17-10060|
DECISION AND ORDER
The assessments made by the Board of Equalization of St. Louis County (BOE) are AFFIRMED. Complainants Lijun Wang and Xialong Qiu (Complainants) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Complainants appeared pro se.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel, Steven Robson.
Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).
Complainants appealed on the ground of overvaluation and discrimination.
Respondent initially set the true value in money (TVM) of the subject properties, as residential property, as set forth in the table, below:
|Appeal No.||Parcel/Locator No.||Respondent’s Valuation|
The BOE valued the subject properties, as residential property, as set forth in the table, below:
|Appeal No.||Parcel/Locator No.||BOE’s Valuation|
The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction or improvement to the property. Section 137.115.1 RSMo The State Tax Commission (STC) takes these appeals to determine the TVM for the subject property as the property existed on January 1, 2017, under the economic conditions for 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. Complainants timely appealed to the STC.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on December 6, 2017, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri.
- Identification of Subject Property. The subject properties are identified as set forth in the table, below:
|Appeal No.||Parcel/Locator No.||Address|
|17-10054||13K220495||8661 North, St. Louis, MO 63114|
|17-10055||13K311135||3663 Chaney, St. Louis, MO 63114|
|17-10059||16K211533||8242 Appleton, St. Louis, MO 63132|
|17-10060||16K330311||7855 Birchmont Dr., St. Louis, MO 63130|
(Exhibit A; Exhibit 1)
- Description of Subject Property. The parties presented scant evidence describing the characteristics of the subject properties. (Exhibit A; Exhibit 1, 2, 3, 4) The Hearing Officer obtained most of the information in the table, below, from the St. Louis County Real Estate Database:
|Appeal No.||Parcel/Locator No.||Address||Description|
|17-10054||13K220495||8661 North, St. Louis, MO 63114||Approximately 8,750 square-foot lot; 891 square-foot, bungalow-style, single-family home; two bedrooms; one bathroom; built in 1951; partially finished attic|
|17-10055||13K311135||3663 Chaney, St. Louis, MO 63114||Approximately 6,325 square-foot lot; 1,053 square-foot, ranch-style, single-family home; three bedrooms; one bathroom; built in 1955; full basement|
|17-10059||16K211533||8242 Appleton, St. Louis, MO 63132||Approximately 4,560 square-foot lot; 928 square-foot, bungalow-style, single-family home; two bedrooms; one bathroom; built in 1937; full basement|
|17-10060||16K330311||7855 Birchmont Dr., St. Louis, MO 63130||Approximately 6,750 square-foot lot; 1,000 square-foot, bungalow-style, single-family home; three bedrooms; one bathroom; built in 1953; full basement|
- Assessment. Respondent valued the subject properties as described in the table on page 2 of this Decision and Order.
- Board of Equalization. The BOE sustained Respondent’s valuations of the subject properties.
- Complainant’s Evidence. Complainants opined that the TVM of each of the subject properties as of January 1, 2017, was:
|Appeal No.||Parcel/Locator No.||Complainants’ Opinion of TVM|
To support their opinion of value, Complainants offered Exhibit A, which was a multiple-page document containing the addresses and the assessed valuations of comparable properties within the same neighborhoods as the subject properties. Complainants primarily argued that the subject properties’ assessed valuations must be incorrect when compared to the assessed valuations of neighboring properties. Exhibit A also contained the “market sales price” for additional comparable properties in the same neighborhood as the subject properties:
|Appeal No. 17-10054 Parcel/Locator No. 13K220495 8661 North, St. Louis, MO 63114|
|Comparable||Sale price||Sale date||Reported characteristics|
|No. 1||$20,000||7/29/2015||1,447 square feet, four bedrooms|
|No. 2||$25,875||10/24/2016||948 square feet, two bedrooms|
|No. 3||$56,750||6/6/2016||1,195 square feet, three bedrooms|
|No. 4||$45,000||10/21/2016||1,447 square feet, three bedrooms|
|Appeal No. 17-10055 Parcel/Locator No. 13K311135 3663 Chaney, St. Louis, MO 63114|
|Comparable||Sale price||Sale date||Reported characteristics|
|No. 1||$25,000||12/28/2016||1,026 square feet, three bedrooms|
|No. 2||$40,000||2/17/2017||956 square feet, three bedrooms|
|No. 3||$18,000||7/22/2016||1,248 square feet, three bedrooms|
|Appeal No. 17-10059 Parcel/Locator No. 16K211533 8242 Appleton, St. Louis, MO 63132|
|Comparable||Sale price||Sale date||Reported characteristics|
|No. 1||$23,000||7/29/2015||850 square feet, two bedrooms|
|No. 2||$21,500||10/24/2016||1,320 square feet, three bedrooms|
|No. 3||$33,000||6/6/2016||875 square feet, two bedrooms|
|No. 4||$20,800||10/21/2016||900 square feet, two bedrooms|
|No. 5||$20,000||3/31/2016||940 square feet, three bedrooms|
|Appeal No. 17-10060 Parcel/Locator No. 16K330311 7855 Birchmont Dr., St. Louis, MO 63130|
|Comparable||Sale price||Sale date||Reported characteristics|
|No. 1||$28,000||11/7/2016||1,000 square feet, two bedrooms|
|No. 2||$24,900||3/25/2016||1,000 square feet, three bedrooms|
|No. 3||$32,650||11/3/2016||1,200 square feet, three bedrooms|
|No. 4||$25,000||2/20/2016||1,290 square feet, two bedrooms|
Complainants testified that the subject property in Appeal No. 17-10054 had been purchased in 2011 for $44,000; the subject property in Appeal No. 17-10055 had been purchased in 2011 for $47,000; the subject property in Appeal No. 17-10059 had been purchased in 2014 for $21,000; and the subject property in Appeal No. 17-10060 had been purchased in 2009 for $33,000. The subject properties were rented to tenants. Complainants testified that none of the subject properties were encumbered by a mortgage. Complainants testified that none of the subject properties had been listed for sale or appraised within the three years prior to the evidentiary hearing. Complainants testified that no improvements had been made to the subject properties between January 1, 2015, and January 1, 2017. Complainants testified that, if they decided to list the subject properties for sale, their asking prices would be $50,000 for Appeal No. 17-10054; $40,000 to $45,000 for Appeal No. 17-10055; $35,000 for Appeal No. 17-10059; and $40,000 for Appeal No. 17-10060.
Respondent did not object to Complainants’ exhibit, which was admitted into evidence.
On cross examination, Ms. Wang specifically testified that she had experience selling properties but no formal training valuing properties. Ms. Wang testified that she knew the neighborhoods of the subject properties and had been inside comparable properties and conducted online research. Ms. Wang testified that she compared the square footage and sale prices of comparable properties but that she did not research the buyer and seller to determine the conditions of the sales. Ms. Wang testified that she did not know how to research the conditions of the sales to determine their validity.
- Respondent’s Evidence. Respondent offered as evidence the BOE’s Findings and Notice of Decision for each of the subject properties. (Exhibits 1, 2, 3, and 4) Complainants did not object to Respondent’s exhibits, all of which were admitted into evidence.
- Presumption of Correct Assessments Not Rebutted. Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessments made by the BOE.
CONCLUSIONS OF LAW AND DECISION
The STC has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement. 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, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Investigation by Hearing Officer
In order to investigate appeals filed with the STC, 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 RSMo (2000) as amended. 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.
During the hearing, the Hearing Officer inquired of Complainants.
There exists a presumption of correct assessment by the BOE – the BOE presumption. The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then Respondent is required to rebut the BOE presumption.
In the present appeals, the BOE sustained the initial valuation of Respondent, and Complainants are now seeking to lower the BOE’s assessment; therefore, the BOE presumption applies.
The Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.” Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993). “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.” Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. 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). See also, 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).
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.” Westwood Partnership, 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. W.D. 1991).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783. 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. E.D. 1980).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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).
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 deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the STC. 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, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; 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. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347.
“Each method uses its own unique factors to calculate the property’s true value in money.” Id. “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 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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.
In this case, Complainants’ evidence was neither substantial nor persuasive to rebut the presumption of correct assessment by the BOE. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion. Id.
Complainants primarily argued that the subject properties’ assessed valuation must be incorrect when compared to the assessed valuation of neighboring properties. However, in order to accept this argument as true, one would be required to speculate that the assessed valuation of neighboring properties was correct while the assessed valuation of the subject property was incorrect. Moreover, although Complainants’ evidence resembled the sales comparison approach to valuing the subject properties, Complainants evidence of comparable sales was incomplete. Exhibit A contained raw data regarding comparable sales, which Ms. Wang acknowledged were not necessarily transactions between willing buyers and sellers because she did not know how to research the conditions of the sales. Exhibit A also failed to show any market-based dollar adjustments for differences between the comparables and the subject properties. Consequently, Exhibit A does not provide enough information to support a reliable estimate of TVM for the subject properties.
The TVM for the subject properties as determined by the BOE is AFFIRMED. The assessed value for the subject properties for tax year 2017 is set forth in the table below:
|Appeal No.||Parcel/Locator No.||Address||BOE’s Determination of TVM||Assessed Value|
|17-10054||13K220495||8661 North, St. Louis, MO 63114||$66,400
|17-10055||13K311135||3663 Chaney, St. Louis, MO 63114||$68,900
|17-10059||16K211533||8242 Appleton, St. Louis, MO 63132||$42,500
|17-10060||16K330311||7855 Birchmont Dr., St. Louis, MO 63130||$78,600
Application for Review
A party may file with the STC 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 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
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.
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 April 10th, 2018.
STATE TAX COMMISSION OF MISSOURI
Amy S. Westermann
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 10th day of April, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
 During cross examination, Ms. Wang testified that Complainants had not conducted any statistical analysis (ratio study) of residential properties in St. Louis County and did not have any evidence other than the assessed values of neighboring properties to support the claim of discrimination. Accordingly, the claim of discrimination is deemed waived.