Markirk Development v. Koons (Jackson)

State Tax Commission of Missouri

 

MARKIRK DEVELOPMENT, LLC.)

)

Complainant,)

)

)Appeal Nos.11-30526 thru 11-30552

v.)

)

CURTIS KOONS,)

DIRECTOR OF ASSESSMENT,)

JACKSON COUNTY, MISSOURI,)

)

Respondent.)

 

DECISION AND ORDER

 

HOLDING

 

Decisions of the Jackson County Board of Equalization are SUSTAINED.Hearing Officer finds Complainant did not rebut the presumption of correct assessment/classification by the Board.

Complainant appeared by Counsel, Christopher Byrd.

Respondent appeared by Counsel, William Snyder.

Case heard and decided by Senior Hearing Officer Luann Johnson.

ISSUE

The Commission takes these appeals to determine the classification for the subject properties on January 1, 2011, and January 1, 2012.

SUMMARY

Complainant appeals the decision of the Jackson County Board of Equalization, which sustained the classification of the subject properties as residential and set value as follows:

	Assessor’s Values		Board Values
Appeal Number	Market Value	Assessed Value	Market Value	Assessed Value
11-30526	$16,500	$3,135	$17,400	$3,306
11-30527	$16,500	$3,135	$20,250	$3,848
11-30528	$16,500	$3,135	$20,250	$3,848
11-30529	$16,500	$3,135	$17,850	$3,392
11-30530	$16,500	$3,135	$19,500	$3,705
11-30531	$16,500	$3,135	$17,850	$3,392
11-30532	$16,500	$3,135	$17,500	$3,705
11-30533	$16,500	$3,135	$19,500	$3,705
11-30534	$16,500	$3,135	$19,500	$3,705
11-30535	$16,500	$3,135	$19,500	$3,705
11-30536	$16,500	$3,135	$19,500	$3,705
11-30537	$16,500	$3,135	$18,600	$3,534
11-30538	$16,800	$3,192	$20,250	$3,848
11-30539	$16,800	$3,192	$20,250	$3,848
11-30540	$16,500	$3,135	$17,850	$3,392
11-30541	$18,000	$3,420	$17,400	$3,306
11-30542	$16,500	$3,135	$17,850	$3,392
11-03543	$16,500	$3,135	$17,850	$3,392
11-30544	$16,500	$3,135	$19,200	$3,648
11-30545	$16,500	$3,135	$18,600	$3,534
11-30546	$16,500	$3,135	$18,600	$3,535
11-30547	$16,500	$3,135	$18,600	$3,534
11-30548	$18,000	$3,420	$28,500	$5,415
11-30549	$18,000	$3,420	$28,500	$5,415
11-30550	$18,000	$3,420	$28,500	$5,415
11-30551	$18,000	$3,420	$28,500	$5,415
11-30552	$18,000	$3,420	$28,500	$5,415

 

Complainant argued that the correct classification of the subject properties was agricultural and proposed an assessed value of $10 per parcel.The basis for the value was not explained.A hearing was conducted on July 10, 2012, at the Jackson County Courthouse, Kansas City, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant’s Evidence

 

Official Notice

On July 16, 2012, pursuant to Section 536.070(6), RSMo, the hearing officer advised the parties that she intended to take official notice of University of Missouri Extension publications No. G4650 – Establishing Forages, and No. G4646 – Tall Fescue, for the purpose of determining recommended procedures for producing a good hay crop.

FINDINGS OF FACT

1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decisions of the Jackson County Board of Equalization.

2.In order to prevail, Complainant must demonstrate that the subject properties were devoted primarily (principally, fundamentally, first in intention, most importantly) to agricultural use during the period in question.See Conclusions of Law.

3.The subject properties consist of twenty six residential lots within the City of Blue Springs, Missouri.

4.The lots have been platted for residential use.Streets, sanitary and storm sewers, electrical, telephone and cable lines have been installed to the platted areas.[1]Although it is clear that the lots have been marketed for residential use, beyond Mr. Cameron, who testified that he had no actual knowledge of marketing, Complainant had no representative available at hearing who could testify as to marketing of the subject parcels.

5.The properties were planted with fescue and fertilized in December 2010 in hopes of gaining a reclassification to agricultural.

There is no evidence that a soil test was performed.Soil testing prior to seeding determines fertility practices.[2]

No evidence was presented which suggests Complainant, or Complainant’s agent Mr. Cameron, made any attempt to learn about establishing forage or to follow any recommendations for creating good forage.

Fescue “should not be [planted] later than August 31 in extreme northern Missouri, September 15 in central Missouri and September 30 in southern Missouri.[3]Essentially, seeding in December, 2010, accomplished nothing.

6.Prior to the cutting of the “hay,” Complainant mowed the grass twice or three times in 2011 in order to comply with the City of Blue Springs zoning, limiting whatever other agricultural purpose might have existed on the property during 2011.The property has since been foreclosed by the bank and the bank has made no attempt to cut hay has been made in 2012.7.One and one-half bales of hay were produced off the property in 2011.The evidence demonstrated that the bales were sold, but no one was able to testify that the bales were used for agricultural purposes.The individual who baled the hay testified that most people were not interested in purchasing fescue hay and that the hay was of poor quality.

8.Complainant has failed to present substantial and persuasive evidence demonstrating the property was devoted primarily to agricultural use during tax year 2011.No evidence whatsoever was presented as to agricultural use during tax year 2012.

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.[4]

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice.[5]

Courts will take judicial notice of their own records in the same cases.[6]In addition, courts may take judicial notice of records in earlier cases when justice requires[7] or when it is necessary for a full understanding of the instant appeal.[8] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[9]

Agencies may take official notice of technical or scientific facts, not judicially cognizable, within their competence, if they notify the parties, either during a hearing or in writing before a hearing, or before findings are made after hearing, of the facts of which they propose to take such notice and give the parties reasonable opportunity to contest such facts or otherwise show that it would not be proper for the agency to take such notice of them.[10]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[11]

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 (classification) should have been placed on the property.[12]

Agricultural Land

Under Missouri statutory law, property shall be classified as agricultural and horticultural property when “real property [is] used for agricultural purposes and devoted primarily to the raising and harvesting of crops . . .”Section 137.016.1(2), RSMo.The classification is determined by the actual use put to the property.[13]Cutting hay is an agricultural activity and such activity can be sufficient to cause real property to be classified as “agricultural property.”[14]

The determination of whether or not a property is being used for agricultural purposes does not turn upon the profitability of the endeavor but upon whether the property is primarily devoted to the raising and harvesting of an agricultural crop.Hay is an agricultural crop.[15]

Devoted Primarily

“Primary purpose” means that which is first in intention; which is fundamental.“Primarily means principally.”[16]Principal means chief; primary; most important.Black’s Law Dictionary, 7^th Edition, 1999.Whether a property is devoted primarily to the raising and harvesting of crops is a fact driven inquiry dependent, therefore, on the evidence presented. [17]

Statutory Construction

Statutory construction is a matter of law.The primary rule of statutory construction is to determine the legislative intent from the language used in the statute by considering the plain and ordinary meaning of the words used therein.Where the language is clear and unambiguous, [the courts] will give effect to the language as written, and will not engage in statutory construction. [The] Court presumes that the legislature intended that every word, clause, sentence, and provision of the statute have effect and should be given meaning.Conversely, [the court] presumes that the legislature did not include excess language or idle verbiage in a statute.Courts are not authorized to read a legislative intent into a statute that is contrary to the intent made evident by the plain and ordinary meaning of the statutory language.[18]

Standard for Valuation

Section 137.017.1, RSMo provides “For general property assessment purposes, the true value in money of land which is in use as agricultural and horticultural property, as defined in Section 137.016, shall be that value which such land has for agricultural or horticultural use. . .”

Land Grades

Section 137.021.1, RSMo provides “ . . . .the state tax commission shall promulgate by regulation and publish a value based on productive capability for each of the several grades of agricultural and horticultural land. . . .”

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.[19]

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.[20]

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 she 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.[21]

Complainant’s Burden of Proof

In order to prevail, Complainant must present substantial and persuasive evidence that the property was “devoted primarily” to raising and harvesting crops on January 1, 2011.[22]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.

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[23]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.[24]

Decision

This case is substantially different from the Rinehart v. Bateman case.In Bateman, the assessor agreed that the proper classification of the subject property was agricultural.The disagreement was whether it should be valued according to productive use value or as vacant and unused agricultural property.In this case, Respondent, and the Board of Equalization, do not agree that the proper classification of the property is agricultural.

Also in Bateman, the evidence was that the taxpayer had a long history of harvesting hay from the property.The history included soil testing, seeding with red clover and fertilizing the property to maximize hay production.Although profitability is not mandated by statute, we would anticipate that a reasonably prudent person who was “primarily devoting”land to hay production would take logical and reasonable steps to create a good hay crop.Although there is no bright line, there should be more evidence that the property was devoted to agricultural use than that the property was devoted to residential use.The fact that someone planted fescue in December, when it clearly wouldn’t grow, completely fails to persuade this hearing officer that the property was devoted primarily to raising and harvesting crops.

The Hearing Officer takes notice that advice on raising fescue and various other forms of forage is available on the University of Missouri Extension website.[25]None of the suggestions on proper management contained in this publication were discussed by Complainant.

ORDER

The assessed valuations for the subject parcels as determined by the Assessor and sustained by the Board of Equalization for Jackson County for the subject tax day are AFFIRMED.

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, 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 appeal is based will result in summary denial. [26]

The Collector of Jackson 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 September 12, 2012.

 

STATE TAX COMMISSION OF MISSOURI

 _____________________________________

Luann Johnson

Senior Hearing Officer

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 12^thday of September, 2012, to:Christopher Byrd, 4131 N. Mullberry Dr., Suite 200, Kansas City, MO 64116, Attorney for Complainant; William Snyder, Senior Deputy County Counselor, Jackson County Courthouse, 415 E. 12th Street, Room 200, Kansas City, MO 64106, Attorney for Respondent; Curtis Koons, Director of Assessment; Mary Jo Spino, Clerk; V. Edwin Stoll, Director of Collections, Jackson County Courthouse, 415 E. 12th Street, Kansas City, MO 64106; and Bob Ensminger, Real Estate Records, City of Kansas City, 1st Floor, City Hall, 414 E. 12th Street, Kansas City, MO 64106.

 

___________________________

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