STATE TAX COMMISSION OF MISSOURI
|LIJUN WANG & XIAOLONG QIU,||)|
|v.||)||Appeal Number 15-13397|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
The assessment made by the Board of Equalization of St. Louis County (BOE) is SET ASIDE. Respondent Jake Zimmerman, St. Louis County Assessor, (Respondent) presented substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish that the assessed value in money for the subject property for tax years 2015 and 2016 is set at $10,640 residential ($56,000 true market value or TMV).
Complainants Lijun Wang and Xiaolong Qiu (Complainants) appeared pro se.
Respondent Jake Zimmerman, St. Louis County Assessor, (Respondent) appeared by Steven Robson, Assistant County Counselor.
Case heard and decided by Senior Hearing Officer Amy S. Westermann.
Complainants appealed on the grounds of overvaluation. Respondent initially set the TMV of the subject property at $87,200, as residential property. The BOE sustained Respondent’s valuation. The Commission takes this appeal to determine the TMV of the subject property on January 1, 2015.
The Senior 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 State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing, which was held on July 13, 2016, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri.
- Identification of Subject Property. The subject property is located at 7340 Milan Ave., University City, St. Louis County, Missouri. The property is identified by Parcel/Locator number 16J140012. (Complaint; Exhibit 1)
- Description of Subject Property. The subject property consists of a 5,723 square foot residential lot improved by a 1,216 square foot, ranch style, single family residence built in 1954. (Exhibit A) The subject property includes a 1,216 square foot unfinished basement; two bedrooms; one bathroom; a one-car attached garage; a patio; and one fireplace. (Exhibit A) The exterior consists of brick construction. (Exhibit A)
- Assessment. Respondent set a true market value (TMV) on the subject property at $87,200 residential, as of January 1, 2015.
- Board of Equalization. The BOE sustained Respondent’s TMV of the subject property.
- Complainant’s Evidence. Complainants testified in their own behalf. Complainants testified that they had purchased the subject property in October 2014 for approximately $36,000. Complainants testified that the subject property had been listed with a realtor and publicly advertised. Complainants testified that no mortgage encumbered the subject property and that they had not commissioned an appraisal of the subject property in the three years preceding the hearing. Complainants testified that they had made improvements in the form of plumbing repairs and interior painting between January 1, 2013, and January 1, 2015. On the Complaint, Complainants proposed a TMV of $35,000. During their testimony, however, Complainants opined that the subject property’s TMV as of January 1, 2015, was $40,000.
Complainants offered as evidence an email they had written (Exhibit A), which stated:
Bought house only for $36,000 [at] the end of 2014. The [assessed] value for similar house is (sic) listed below.
7362 Milan — $31,000, 7535 Milan — $36,000
Complainants further testified that the two comparable properties listed in Exhibit A were neighboring properties to the subject property. Respondent did not object to Complainant’s evidence, which was received into the record.
- Respondent’s Evidence. Respondent offered the testimony of Residential Real Estate Appraiser Senior Nancy McGrath (the Appraiser) along with the Appraiser’s report. (Exhibit 1) The Appraiser opined that the TMV of the subject property as of January 1, 2015, was $56,000. The Appraiser testified that she had used the direct sales comparison method of analysis to arrive at an opinion of TMV. The Appraiser had compared three properties similar in size, type, age, and condition to the subject property. (Exhibit 1) The Appraiser made market-based adjustments to the comparable properties. Notably, each of the three comparables received a $7,000 downward adjustment for updated kitchens. (Exhibit 1) The adjusted sale prices of the comparable properties ranged from $55,200 to $56,200. (Exhibit 1) The Appraiser placed the most weight on Comparable No. 1 because it was most similar to the subject property and required the fewest adjustments. The adjusted sale price of Comparable No. 1 was $56,000, and it was located within one mile of the subject property. Complainants did not object to Respondent’s evidence, which was received into the record.
CONCLUSIONS OF LAW AND DECISION
The Commission 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 Senior 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. 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 true value in money 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 Commission, 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.
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.
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 Commission “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).
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE. In charter counties or the City of St. Louis, there exists by statutory mandate a presumption that the Assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways. 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 it also would be applicable to the Respondent. The computer-assisted presumption is applicable only if (1) the BOE lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and (2) it has not been shown that the Assessor’s valuation was not the result of a computer assisted method. The BOE’s valuation is assumed to be an independent valuation.
In the present appeal, the BOE sustained the initial valuation of Respondent; therefore, the computer-assisted presumption is not applicable in the present appeal.
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, 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).
Although Complainants presented evidence to support their opinion of the subject property’s TMV, that evidence is neither substantial nor persuasive because, if relied upon, the fact finder would be required to resort to speculation to conclude the TMV of the subject property on January 1, 2015, should be $40,000.
First, Complainant’s evidence was not substantial to support an opinion as to value. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Complainants admitted that Exhibit A did not contain sale prices for the comparable properties they presented but, instead, contained assessed values obtained from the Assessor’s public information on the St. Louis County website. Furthermore, Complainants’ opinion that the subject property had a value of $40,000 was not supported by any of the three recognized approaches to value. Complainants testified that no appraisal of the subject property had been performed within the three years prior to the evidentiary hearing. Although Complainant presented Exhibit A and testified concerning the assessed values of allegedly similar homes located in the same neighborhood as the subject property, Complainants did not present any market-based data showing specific similarities and differences between the subject property and the comparable properties or the value of those similarities and differences. Second, Complainant’s evidence was not persuasive to rebut the presumption of true market value advocated by Respondent. 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 testified that they purchased the subject property in 2014 for approximately $36,000 and that they had made improvements to the residence in the form of plumbing repairs and interior painting. Complainants’ Exhibit A did not show actual sale prices for the comparables they had presented, so the trier of fact had no basis for reviewing Complainants’ comparables against the subject property.
On the contrary, Respondent presented substantial and persuasive evidence from which the trier of fact could conclude that TMV of the subject property as of January 1, 2015, was $56,000. The Appraiser’s report compared three properties similar to the subject property and made market adjustments to the comparables. The Appraiser gave the most weight to Comparable No. 1 because it was most similar to the subject property. The only substantial difference between Comparable No. 1 and the subject property was that Comparable No. 1 had an updated kitchen. The Appraiser accounted for this difference by making a $7,000 downward adjustment in the sale price of Comparable No. 1. The Appraiser also testified that the subject property had been sold through foreclosure, which could have explained the reason Complainants’ had purchased it for only $36,000, which was lower than the market price.
Given that Respondent’s evidence was substantial and persuasive to rebut the presumption that the BOE’s valuation was correct, the Senior Hearing Officer finds it reasonable to find and conclude that the TMV of the subject property on January 1, 2015, was $56,000.
The true market valuation for the subject property as determined by Respondent for the subject tax day and sustained by the BOE is SET ASIDE.
The assessed value for the subject property for tax years 2015 and 2016 is set at $10,640 residential ($56,000 TMV).
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
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 23rd day of August, 2016.
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 23rd day of August, 2016, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
 In the Complaint, Complainants also checked the box “Discrimination” as a ground for the appeal. However, no evidence of discrimination was presented at the Evidentiary Hearing.