State Tax Commission of Missouri
|MERCY HEALTH EAST COMMUNITIES,||)|
|v.||)||Appeal No. 15-32539|
|SCOTT SHIPMAN, ASSESSOR,||)|
|ST. CHARLES CO., MISSOURI,||)|
DECISION AND ORDER
Complainant failed to timely appeal to the State Tax Commission. State Tax Commission is without jurisdictional authority to hear appeal.
Complainant appeared by attorney Apollo Carey.
Respondent appeared by attorney Amanda Jennings.
Case heard and decided by Hearing Officer Maureen Monaghan.
Complainant appeals on the ground of exemption for the 2014 tax year. Respondent moved to dismiss.
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 not proper. Complainant did not timely appeal to the St. Charles County Board of Equalization upon receipt of notice of change of assessment in 2014.
- Proceedings. Complainant filed an appeal with the State Tax Commission on or about September 15, 2015. St. Charles County Assessor moved to dismiss the appeal for lack of jurisdiction. Complainant filed a response. Respondent replied.
- Identification of Subject Property. Subject property is identified as 3-0104-0353-00-001 located at 4245 Mid Rivers Mall Drive, St. Charles, Missouri.
Assessment 2012 – Vacant, agricultural;
September 25, 2012 – Complainant purchased the property;
Assessment 2013 – Vacant, agricultural;
November 2013 – Complainant began improvements on the property;
Assessment 2014 – Commercial
April 25, 2014 – Notice of Change of Assessment which included an explanation of the administrative appeal process.
July 10, 2014 – Email discourse between the parties. Assessor’s Office informs Complainant they have no authority to change an assessment after July 1. They informed Complainant to file with the Board of Equalization by the second Monday in July.
December 31, 2014 – Taxes paid under protest
February 17, 2015 – Complainant’s Application for Exemption
March 26, 2015 – Assessor’s Determination that property is exempt for tax year 2015.
July 8, 2015 – Complainant files an appeal with the Board of Equalization solely as to the 2014 tax assessment. (Ex 2 Reply Brief).
July 2015 – County moves for dismissal and Board dismisses any appeal regarding the 2014 tax year.
August 17, 2015 – Board determines property is exempt for 2015. (Ex. G of Complainant)
September 15, 2015 – Complainant files an appeal with the State Tax Commission regarding Tax Year 2014.
CONCLUSIONS OF LAW AND DECISION
Property is assessed as of January 1. The assessor determines value and sub-classification of real property. Property is assessed at different percentages of value according to the type of property or its use. Residential and agricultural property is classified as such due to its use. Residential property is that being used as a residence; an agricultural property is that being used for raising crops, livestock, dairying, etc. Real Property is assessed at different percentages of true value based upon its sub-classification:
Residential 19% of value
Agricultural 12% of value
Commercial 32% of value
Real property is assessed on a two-year cycle. The value placed on a property for an odd-numbered year is placed on the property for the next even numbered year. However, any physical change to a property which would affect value, can be reflected on the tax rolls for the even-numbered year. If the assessor determines a change to the assessment, a notice of increase is sent to the taxpayer.
By July 1, all assessors must have completed their assessment rolls and turned them over to the county clerk. Local Boards of Equalization meet to hear valuation appeals by taxpayers in July. The deadline for appealing to the Boards of Equalization in first class counties is before the third Monday in June unless extended by the board. Appeals from the Board of Equalization may be made to the State Tax Commission by September 30 or 30 days after the board’s decision, whichever is later. An appeal must be made to the board of equalization before the State Tax Commission may hear the appeal. Tax rates must be set and certified to the county clerk in September and October for all local governments. Tax bills are prepared and sent to taxpayers as soon thereafter as possible. Taxes are due on or before December 31, and become delinquent after that date.
The legal authority for property tax exemptions is found in Article X, Section 6, of the Missouri Constitution of 1945 and at Section 137.100, RSMo. Exempt properties includes those properties used for charitable purposes:
All property, real and personal, actually and regularly used exclusively for religious worship, for schools and colleges, or for purposes purely charitable and not held for private or corporate profit, except that the exemption herein granted does not include real property not actually used or occupied for the purpose of the organization but held or used as investment even though the income or rentals received therefrom is used wholly for religious, educational or charitable purposes; (emphasis added) Section 137.100(5)
The Constitution authorizes these exemptions and the legislature enacted them at Section 137.100, RSMo by expressly listing these categories of exemption. The legal test for a charitable exemption is whether:
(1) The property is dedicated unconditionally to the charitable activity:
(2) The property is owned and operated on a not for profit basis; and
(3) The dominant use of the property is for the benefit of an indefinite number of people and directly or indirectly benefits society generally.
Franciscan Tertiary Province of Missouri v. State Tax Commission, 566 S.W.2d 213, 224 (Mo Banc 1978); Twitty v. State Tax Commission, 896 S.W.2d 680, 684 (Mo. App. S.D. 1995).
Every person who thinks himself aggrieved by the assessment of his property may appeal to the county Board of Equalization, in person, by attorney or agent, or in writing. Section 137.275 RSMo. Every owner of real property or tangible personal property shall have the right to appeal from the local Boards of Equalization to the State Tax Commission no later than September 30. Section 138.110 RSMo.
Subject property had been assessed as agricultural property, vacant and unused (market value x 12% = assessed value). The Complainants began construction in 2013. The Assessor made a determination that on January 1, 2014, the subject property no longer had an agricultural use. Due to the improvements made on the property in 2013, the Assessor was allowed to reassess the property in the even year. The property was assessed as commercial (market value x 32% = assessed value). Complainant received notice of the change in assessment and notice of the process for appealing the assessment. (The Complainant acknowledges that it did not pursue any administrative remedy.) On December 31, 2014, Complainant paid its taxes under protest under Section 139.031 RSMo
Section 137.385 RSMo provides that a person may appeal an assessment before the Board of Equalization and sets a deadline. The deadline may be extended by the Board of Equalization. The Board of Equalization in St. Charles County set a deadline for appeals as the second Monday in July. For the Commission to have jurisdiction of a case, the taxpayer must have first appealed to the local Board of Equalization unless they were not able due to lack of knowledge of an assessment. Section 138.430, RSMo 1994; Op. Att’y Gen. 27-50, Evans (Nov. 21, 1950). The Complainant admits that they received notice of the change of assessment. The Complainant received notice of the administrative proceedings. Complainant admits they did not seek review of the 2014 assessment. Complainant did not seek review with the County Board of Equalization or the State Tax Commission in 2014 for the 2014 assessment.
Complainant cites Lake St Louis Community Association v State Tax Commission, 759 SW2d 843 (S.Ct 1983), as support for filing an appeal out of time. Lake St. Louis Community Association was determined to be an exempt organization by the county assessor. In the spring of 1986, the organization received notices of valuation of their property. The organization availed itself to the administrative process in that an inquiry was made in June (prior to the deadline for filing with the Board of Equalization). The organization was notified in June that they were considered “exempt from real estate taxes…” In November 1986, the organization received a tax bill. The organization contacted the Assessor and was informed the Assessor had changed his mind. The organization requested reconsideration. The organization sought review with the Board of Equalization in 1987 for the 1986 determination. The Board of Equalization denied the organization an appeal. The organization appealed to the State Tax Commission. The State Tax Commission denied the appeal as being filed out of time and without a Board of Equalization decision. The organization appealed. The Supreme Court remanded the case to the State Tax Commission stating:
We have been quite strict in requiring taxpayers to follow the statutory plan for review of assessments when the taxing authorities have complied with all procedural requirements. But we have not required taxpayers to do the impossible, and have had no patience with procedural requirements which are sought to be imposed to deny any meaningful review. Our decision should impose no burden on taxing authorities who follow the statutes and make their positions clear to taxpayers.
The facts of this appeal differ from Lake St. Louis Community Association v State Tax Commission in that no actions of the County thwarted the Complainant’s pursuit of review. In this appeal, Complainant was provided timely notice of the change in assessment for the 2014 tax year. Complainant was notified of the administrative procedures. Complainant had the opportunity to file with the County Board of Equalization for review of the assessment. Complainant admits that it did not seek administrative review in 2014. Complainant broke ground in November 2013 for construction that they hoped would allow them an exemption for tax year 2014. Complainants cite no reason why they waited until February 2015, over one year after they broke ground to submit an Application for Exemption to the Assessor. There is no evidence that Respondent thwarted or imposed any obstacle to Complainant to timely seek administrative review. Instead, the evidence suggests that Complainant failed to follow the administrative procedures.
In Missouri American Water v. Collector, 103 SW3d 266 (Mo Ct App 2003), the Court found in favor of the County when the taxpayer failed to pursue its administrative remedies. The taxpayer sought an appeal for the prior assessment cycle based upon an error by the taxpayer. The taxpayer declared property in the amount of $12.5 million and sought to amend the amount to less than $1.5 million. The Court stated that neither public policy nor statutory purpose would be served for failing to hold the taxpayer accountable for its lack of action when the government is not at fault; to do so would render collection uncertain and encourage suits for refunds. The taxpayer bears the burden of discovering whether it has a challenge to the assessment before payment so that he can pursue the appropriate administrative remedies.
Complainant could have sought exemption status, could have sought remedy through informal meeting with the Assessor, appealed to the Board of Equalization after receiving notice of the change of assessment and appeal process and could have also have filed directly to the State Tax Commission by December 31, 2014. Failure by the Complainant to pursue the appeal in 2014, deprived the State Tax Commission of jurisdiction.
Alternative Remedy – Circuit Court
The Complainant, by paying under protest, could have pursued an action in Circuit Court. Disputes regarding exclusion and exemption of property may be resolved by de novo appeal to the circuit court of the county in which the collector maintains an office. St Peters Community Hospital v. Zimmerman, 914 S.W.2d 26 (S.Ct 1995) The Complainant, for whatever reason, abandoned this avenue of appeal by not filing an action in circuit court.
Complainant paid its 2014 taxes under protest. Complainant failed to pursue action in circuit court regarding the 2014 taxes. Complainant, after failing to pursue an appeal of their 2014 taxes either through administrative remedies or circuit court action, is now attempting to resurrect jurisdiction of the State Tax Commission.
The appeal is dismissed for lack of jurisdiction.
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. 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 this 16th day of March, 2016.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 16th day of March, 2016, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.