STATE TAX COMMISSION OF MISSOURI
|Complainant(s),||)||Appeal No. 21-10125|
|)||Parcel No. 21J530404|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
Matthew Burger (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2021, was $95,000. Complainant alleges overvaluation and argued that the TVM as of that date was $75,000. Complainant did not produce substantial and persuasive evidence of overvaluation. The BOE decision is affirmed. The TVM of the subject property on January 1, 2021, was $95,000.
The evidentiary hearing was held on May 5, 2022, via Webex. Complainant appeared pro se. Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, was represented by counsel, Tim Bowe. The appeal was heard and decided by Senior Hearing Officer Benjamin Slawson.
FINDINGS OF FACT
- The Subject Property. The subject residential real property is located at 7536 Weaver Ave., St. Louis, Missouri. The subject property consists of a single family home built in 1921 with about 900 square feet of living space on a small lot. The house includes one bedroom, one bathroom, a kitchen, and a partially finished basement. Complainant testified that he purchased the subject property in 1985. Complainant has not listed the property for sale in the last three years, nor has he had the property appraised in the last three years. Complainant installed a new roof on the property in 2021 which cost around $6,000.
- Assessment and Valuation. Respondent classified the subject property as residential and determined the TVM on January 1, 2021, was $125,300. The BOE determined the TVM of the subject property as of January 1, 2021, was $95,000.
- Complainant’s Evidence. Complainant introduced Exhibits A through D, which were all admitted into evidence without objection. Complainant’s exhibits are described as follows:
|A||Summary of Complainant’s arguments for overvaluation|
|B||Pictures of the subject property showing needed repairs|
|C||List of St. Louis County’s comparables used for assessment of the subject|
|D||Proposal/Estimate from Mirelli Tuckpointing, LLC|
Complainant testified that his opinion of value for the property as of January 1, 2021, is $75,000. Complainant offered Exhibit A, which is a typed summary of his argument of overvaluation. Complainant asserted that Respondent overvalued the subject property because it is a one bedroom, one bathroom home that is being compared to two bedroom homes which have been updated and remodeled. Complainant offered a list of these properties in Exhibit C, which contains these properties’ addresses, sales prices, as well as each home’s number of bedrooms and bathrooms.
Complainant offered Exhibit B which contains several pictures of the condition issues in the subject. Complainant testified that other than the new roof, Complainant has not updated the house or performed any renovations in many years. One of the main issues that Complainant argued devalues the home is that the basement leaks at one of the corners of the foundation. Complainant noted that this had been repaired before he purchased the home, but now it is leaking again. Photographs in Exhibit B show standing water in the basement due to this issue. Complainant also asserted that other issues also contribute to the property’s lower value, including that the bathroom needs updating and repair due to the water damage in the ceiling, water damage to the ceiling in the bedroom, central air does not work, outdated furnace and duct work, and that the kitchen and windows have not been updated since the mid-1980s. Complainant offered Exhibit D, which is a 2019 estimate of $3,000 from a contractor to perform masonry work on the chimney. Complainant presented all of these issues before the BOE.
Complainant testified that the only people wanting to buy his property are investors. Complainant is not a licensed appraiser. Complainant does not have classroom training or experience making market-based adjustments between comparable sales to determine a TVM of a subject property, nor does he possess classroom training or experience making adjustments for repairs or remodels to determine a TVM of a subject property.
- Respondent’s Evidence. Respondent introduced Exhibit 1, the BOE’s October 29, 2021, Decision Letter. Complainant did not object. Exhibit 1 was admitted into evidence.
- Value. The TVM of the subject property as of January 1, 2021, was $95,000.
CONCLUSIONS OF LAW
- Assessment and Valuation. Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is 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. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a). The TVM is “the fair market value of the property on the valuation date[.]” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). “True value in money is defined in terms of value in exchange not value in use.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020) (internal quotation omitted). “Determining the true value in money is an issue of fact for the STC.” Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48. The STC has wide discretion in selecting the appropriate valuation method but “cannot base its decision on opinion evidence that fails to consider information that should have been considered under a particular valuation approach.” Id., at 348.
The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. For this reason, the comparable sales approach is typically used to value residential property. “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 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.
- Evidence. “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977). The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020). 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. 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.
- Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs, 599 S.W.3d at 7. The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous.” Id. (internal quotation omitted). The taxpayer also must prove “the value that should have been placed on the property.” Id. “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).
- Complainant Did Not Produce Substantial and Persuasive Evidence of Overvaluation.
Complainant did not produce substantial and persuasive evidence to support his $75,000 opinion of value.
The comparable sales approach is typically used to value residential properties improved with a single-family home. “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.” Snider, 156 S.W.3d at 347-48 (internal quotation omitted). Complainant did not offer any comparable sales relevant to the January 1, 2021, valuation date. Complainant took issue with the comparable sales used by Respondent in his assessment. However, Complainant offers no evidence showing that Respondent did not make appropriate market-based adjustments for value considering the differing characteristics between these properties and the subject when determining the TVM of the subject as of January 1, 2021.
Concerning the condition issues with the subject property that Complainant testified about and which are evidenced in Exhibits B and D, Complainant provided no evidence providing a way to quantify the dollar amount effect of these issues on value or showing the BOE value does not account for these issues. The fact that the BOE lowered Respondent’s assessed value of $125,300 to $95,000 suggests that the BOE did take condition issues such as these into account.
Even if Complainant had rebutted the presumption of correct valuation by the BOE, Complainant has not proven that the TVM of the subject property is the amount he has proposed. While a property owner’s opinion of value is generally admissible, the opinion lacks “probative value where it is shown to have been based upon improper elements or an improper foundation.” Shelby Cty. R-IV Sch. Dist. v. Herman, 392 S.W.2d 609, 613 (Mo. 1965); see also Cohen v. Bushmeyer, 251 S.W.3d 345, 349 (Mo. App. W.D. 2008) (noting a property owner’s opinion of value loses probative value when it rests on an improper foundation).
Complainant did not produce substantial and persuasive evidence showing that the subject property was overvalued. Therefore, Complainant’s evidence does not provide the necessary foundation and elements to support his overvaluation claim. Because the STC “cannot base its decision on opinion evidence that fails to consider information that should have been considered” under a recognized approach to value, Snider, 156 S.W.3d at 348, the BOE decision is affirmed.
Complainant did not produce substantial and persuasive evidence showing that the BOE’s value was incorrect. Further, Complainant’s testimony does not provide the necessary foundation and elements to support his overvaluation claim. Complainant admitted he is neither a certified appraiser, nor does he have experience in appraising properties to determine the TVM of a subject property. Because the STC “cannot base its decision on opinion evidence that fails to consider information that should have been considered” under a recognized approach to value, Snider, 156 S.W.3d at 348, the BOE decision is affirmed.
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2021, was $95,000.
Application for Review
A party may file 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 detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person 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.
The Collector of St. Louis County, and 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 the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.
SO ORDERED September 23, 2022.
STATE TAX COMMISSION OF MISSOURI
Benjamin C. Slawson
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on September 23, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
 Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal. Mo. Const. art. X, sec. 14; Section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.