State Tax Commission of Missouri
MARK & GLENDA ELL, )
)
Complainants, )
)
v. ) Appeal Nos. 12-32564 – 12-32566
)
SCOTT SHIPMAN, ASSESSOR, )
ST. CHARLES COUNTY, MISSOURI, )
)
Respondent. )
DECISION AND ORDER
HOLDING
The assessments made by the Assessor are SET ASIDE in part and SUSTAINED in part. Property purchased after date for an appeal to the Board.
In Appeals 12-32564 and 12-3265, the Assessor’s valuation and classification is sustained.
In Appeal 12-32566, the true value in money for the subject property for tax year 2012 is set at $350,000, residential assessed value of $62,700, agricultural assessed value of $2,400.
Complainants appeared pro se.
Respondent appeared by Associate County Counselor, Amanda Jennings.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUES
Complainants appeal, on the ground of overvaluation and misclassification, the assessments made by the Assessor. The Commission takes this appeal to determine the true value in money and correct classification for the subject properties on January 1, 2012. 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. Complainant timely appealed to the State Tax Commission.[1]
2. Evidentiary Hearing. The Evidentiary Hearing was held on January 15, 2012 at the St. Charles County Administration Building, St. Charles, Missouri. Transcript received March 25, 2013.
3. Identification of Subject Properties. The Complainants’ property consists of 3.78 acres improved with a residence, barns, green houses, sheds, and amphitheatre. The properties under appeal include:
|
Appeal Number |
12-32564 |
12-32565 |
12-32566 |
|
Parcel Number |
5-116C-9772-00-36A |
5-116B-9772-00-2 |
5-116B-A101-00-A |
|
Account Number |
T060500482 |
T060500481 |
T060500672 |
|
Land |
1.04 acres |
.99 acres |
1.75 acres |
|
Improvements* |
Horse barn and loft, 2,160 ft2 Horse barn with loft, 1,320 ft2 Greenhouse, 1,500 ft2 Greenhouse, 5,760 ft2 amphitheatre |
Four 80 ft2 sheds |
2.5 story, 2,720 ft2 residence With partial finished basement of 1,436 ft2 7 car detached garage Barn |
|
County’s True Value |
$132,531
|
$131,666
|
$425,135 |
|
Assessment |
$16,890 commercial $9,570 agricultural |
$15,800commercial |
$74,870 residential $3,730 agricultural |
*All improvements were constructed in 2007
4. History of Properties. The subject properties were originally developed in 2007, by Whittaker Builders, to be an organic farm providing fresh produce to the residents of New Town. A single-family residence, a seven car detached garage, a horse barn, a country store, a commercial grade greenhouse, an additional smaller green house and four garden sheds along with a renovating a turn of the century barn that was original to the property to assist in operating as a farm. The properties only operated for approximately a year as a farming/horticultural operation.[2]
5. Sale of Subject. On May 31, 2012, Complainants purchased the three subject tracts plus 4.29 acres adjoining the three tracts for $425,000.[3]
6. Complainants’ Evidence. Complainants offered into evidence Exhibit A. Exhibit A consisted of the appraisal of John C. Hottle. The appraisal appraised the property in Appeals 12-32564 and 12-32565, as well as an additional 4.29 acres that is not the subject of any of these three appeals. The valuation date of the appraisal was August 8, 2012. Exhibit A was received into evidence. Complainants testified at the evidentiary hearing.[4]
7. Respondent’s Evidence. Respondent offered into evidence the following exhibits:
|
EXHIBIT |
DESCRIPTION |
|
1 |
Appraisal – Appeal 12-32566 – Teresa MacLeod |
|
2 |
Appraisal – Appeals 12-32564 & 12-32565 – John C. Hottle |
|
3 |
Glenmark Farms Website Information |
|
5 – 8 |
Aerial Photographs of subject properties and assessment information |
The Exhibits are received into evidence.[5] Keith Hodges, commercial real estate appraiser for St. Charles County, testified at the evidentiary hearing.[6]
8. Hottle Appraisal – Conclusions of Value. The Hottle appraisal concluded a per acre value of $27,000 for the properties in Appeal Nos.12-32564 and 12-32565. It further concluded a value for the horse barns and greenhouses on the property in Appeal 12-32564 of $205,000. The appraisal found the amphitheatre in Appeal No. 12-32564 and the four sheds on the property in Appeal 12-32565 had no contributory value to the real estate. The appraiser’s opinion of value as of August 8, 2012 was $375,000 or a value of $259,810 for the property appealed. (County’s determination of value was $264,197).
9. MacLeod Appraisal – Conclusion of Value. The MacLeod appraisal concluded a value of $350,000 for the property in Appeal 12-32566.
10. Use of Properties – 2011. As of January 1, 2011, the properties had no active horticultural or agricultural activity being conducted. They were vacant and unused. The properties had been constructed for the purpose of establishing an organic farm, a country store, entertainment venue, and other amenities for the surrounding neighborhood development.
11. Classification of Properties. The County’s classification of the properties is sustained.
12. Valuation of Subject Properties.[7] The true value of the property in Appeals 12-32564 and 12-32565 is sustained. The property in Appeal 12-32566, based upon the appraisal, is assigned a true value in money of $350,000. The property valuation of the residential portion is $330,000 ($62,700 assessed value) and the agricultural portion is $20,000 ($2,400 assessed value).
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.[8]
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.[9] 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.[10]
Complainant’s Burden of Proof
In order to prevail, Complainant 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.[11] 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.”[12]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[13] 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.[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] True value in money is defined in terms of value in exchange and not value in use.[16] It is the fair market value of the subject property on the valuation date.[17] 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.[18]
Valuation of Property – Appeal Nos. 12-32564 & 12-32565
The Hottle appraisal determined a value of $259,810 ($205,000 for improvements and $27,000 per acre of land). The County’s valuation was set at $264,197. The valuation is sustained.
Valuation of Property – Appeal Nos. 12-32566
This parcel constitutes the residential portion of Complainants’ farm. The valuation by Ms. MacLeod of $350,000 is persuasive. She allocated a value of $20,000 to account for the barn on this parcel. The barn is a structure customarily associated with farming. Accordingly, it is valued at $20,000 and assessed at 12%. The remaining portion of the parcel is valued as residential property at $330,000 and assessed at 19%.
Two-Year Assessment Cycle
The Assessor shall annually assess all real property in the following manner: new assessed values shall be determined as of January first of each odd-numbered year and shall be entered in the assessor’s books; those same assessed values shall apply in the following even-numbered year, except for new construction and property improvements which shall be valued as though they had been completed as of January first of the preceding odd-numbered year. Section 137.115.1, RSMo.
Statutes Given Effect As Written
Statutes are to be given effect as written and there is no need for construction of a statute which is clear on its face. The plain language of the statue is to be given effect. State Bd. of
Registration for Healing Arts v. Boston, 72 S.W.3d 260 (Mo. App. W.D. 2002); Bright v. Bright, 989 S.W.2d 196 (Mo. App. S.D. 1999); McDermott v. Carnahan, 934 S.W.2d 285 (Mo. 1996).
Classification of the Property in Appeal 12-32564
The property in Appeal 12-32564 was classified as agricultural and commercial. The amphitheatre and one of the barns (the barn designated as the country store) was classified as commercial property. There was insufficient evidence presented establishing an agricultural use of the properties. Further, there was no evidence as to the Board’s value as to those properties.
The assessor makes two determinations when assessing property: (1) true value in money and (2) classification. No change in classification can be made in the present case as the Assessor may only assess properties in the odd-numbered. See Two-Year Assessment Cycle
Because the word “shall” is used throughout the statute setting forth the authority of the assessor, the assessor is mandated to use the same assessment in the even-numbered year as was used in the preceding odd-numbered year with the sole exception being where there has been new construction and property improvements. In the present case, the qualifying condition of new construction or property improvements does not exist. There was no new construction or property improvements to the subject during the year 2011. The plain language of the statute must be given effect. See, Statutes Given Effect As Written, supra. The compulsory language of the statute mandates the the classification remain unchanged for the year 2012.
In J.C. Nichols v. Boley, Jackson County, STC Appeal 92-33346 (1993), the Commission held that “because there was no new construction and property improvements during 1991, the commercial classification must be maintained for 1992; otherwise, the assessed value would be changed.” Changed, of course, in violation of Section 137.115.1, RSMo. A similar decision was reached in Player’s Club at St. Louis v. Muehlheausler, St. Louis County, STC Appeal 01-10810 (2003).
The classification of the property will be sustained.
ORDER
The assessed valuation for the property in Appeal No. 12-32564 as determined by the Assessor is SUSTAINED.
The assessed valuation for the property in Appeal No. 12-32565 as determined by the Assessor is SUSTAINED.
The assessed valuation for the property in Appeal No. 12-32566 as determined by the Assessor is SET ASIDE. The assessed value for the property for tax year 2012 is set at $65,100.
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. [19]
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 25, 2013.
STATE TAX COMMISSION OF MISSOURI
_____________________________________
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 25th day of June, 2013, to: Mark Ell, 3516 Shire Lane, St. Charles, MO 63301, Complainant; Amanda Jennings, Associate 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
[5] Counsel for Respondent did not actually move for the admission of either Exhibit 1 or 2. However, Complainants made reference to same and relied on both as to their opinions of value for the various parcels. Accordingly, the Hearing Officer considers that they are part of the evidentiary record in the appeals. Exhibit 4 was offered by Respondent, but withdrawn. Furthermore, Exhibit A and Exhibit 1 are the same exhibit.
[7] See, Conclusion of Classification & Valuation – Appeal Nos. 12-32564 & 12-32565 & Conclusion of Classification & Valuation – Appeal No. 12-32566, infra.
[10] Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.
[12] 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)
[15] 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).
[16] 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).
[18] 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.