State Tax Commission of Missouri
MICHAEL L. MILLER,)
v.) Appeal Number 07-42500
IVAN FRIEDEN, ASSESSOR,)
DECISION AND ORDER
Decision of the Barton County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Hearing Officer finds presumption of correct assessment rebutted. True value in money for the subject property for tax years 2007 and 2008 is set at $116,980, residential assessed value of $22,230.
Complainant appeared pro se.
Respondent appeared in person and by Counsel Steven Kaderly, Prosecuting Attorney.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine (1) the true value in money for the subject property on January 1, 2007; and (2) whether there was an intentional plan by the assessing officials to assess the taxpayer’s property at a ratio greater than 19% of fair market value or the average residential assessment ratio for Barton County for the 2007-08 assessment cycle.
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the Barton County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $112,430, assessed value of $21,370, as residential property.Complainant proposed a value of $95,180, assessed value of $18,080.A hearing was conducted on February 13, 2008, at the Barton County Courthouse,Lamar,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant testified in his own behalf.He stated his opinion of fair market value as of January 1, 2007, was $95,180.This was based upon a comparison that Mr. Miller had done between the appraised value placed on the subject property by the assessor and the Assessor’s appraised value of properties used as comparables by two appraisers appraising the subject property.
Mr. Miller’s claim of discrimination was based upon the past history of assessment of the subject and five other properties.
Exhibit A was received into evidence.Exhibit A consisted of the following documents, as per the Index of Information for Michael L. Miller’s Complaint (cover page for Exhibit A).
1. Michael L. Miller Executive Summary
2. State ofMissouri Papers – 3 pages
3. 4/25/2007 Appraisal Notice – $115,550
4. 6/29/2007 Notice of Appeal toBartonCounty
5. 7/23/2007 BartonCountyBoard of Equalization Hearing
6. 7/29/2007 BartonCountyBoard of Equalization Hearing
7. 8/4/2007 BartonCountyBoard of Equalization Hearing
8. August, 2007 Complaint to State ofMissouri
9. Charts (2 pages) Comparison of Appraised Property
10. Assessor’s Office’s Individual Appraisal Sheets for 5 homes from 2000 to 2006
11. 1102 E. 19th Street, May, 2005 Appraisal
12. 1102 E 19th Street, July, 2006 Appraisal
13. 7/24/2007 – 2007 Property Appraisal List from Barton County Assessor’s Office
Respondent testified as to the valuation of the subject property.Exhibit 1 was received into evidence.Exhibit 1 consisted of the following documents.
1. Property Record Card on Subject
2. Revised Property Record Card on Subject
3. Property Record Card on Vankirk Property
4. Property Record Card on Culp Property
5. Two locator maps
6. Property Record Card on Luthi Property, with locator map
7. Property Record Card on Hale Property, with locator map
8. Property Record Card on Noland Property, with locator map
9. Property Record Card on Horton Property, with locator map
10. Property Record Card on Burnett Property, with locator map
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Barton County Board of Equalization.
2.The subject property is located at 1102 E. 19th Street,Lamar,Missouri.The property is identified by parcel number 09-09.0-30-04.0-026-001.060.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Assessor and the Board and establish the true value in money as of January 1, 2007, to be $95,180.
5.On May 5, 2005 the subject property was appraised by Dan Blanchard, Missouri State Certified Residential Real Estate Appraiser at a value of $112,000.Exhibit A:11.
6.On July 7, 2006 the subject property was appraised by Neal Smith, Missouri State Certified Residential Real Estate Appraiser at a value of $123,000.Exhibit A:12.
7.In 2006, a screened porch was converted to a sunroom.This new construction was not included in the valuation of the Miller property at $112,430.The revised appraised value of $116,980, assessed value of $22,230 includes the 2006 addition to the home.
8.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment and prove discrimination by the assessing officials.
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.Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.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.Section 138.431.4, RSMo.
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958). Notwithstanding the provision of Section 138.431.3, RSMo – “There shall be no presumption that the assessor’s valuation is correct,” – the Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005).Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
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 assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.The evidence presented by Mr. Miller, as will be discussed below, was not substantial and persuasive to rebut the presumptions of correct assessment.
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.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).It is the fair market value of the subject property on the valuation date.Hermel, supra.
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.
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.
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, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).
Respondent’s Burden of Proof
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.Hermel, Cupples-Hesse, Brooks, supra.
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, 2007.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).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.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).
The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).
Mr. Miller’s opinion of value ($95,180) is based upon his assertion that the subject property was valued $2,500 less than a property at 151 SE 25th Lane, Lamar. Mr. Miller concluded this from the Blanchard appraisal which concluded a fair market value for the subject of $112,000.Mr. Blanchard had used the sale of the 151 SE 25th Lane property as a comparable and concluded that after adjustments, this comparable provided an indicated value for the subject of $114,515.Exhibit A:11.The Complainant then determined that the 151 SE 25th Lane property had been appraised by the Assessor at $97,680. He therefore subtracted $2,500 from $97,680 to arrive at his opinion of value of $95,180.
No probative weight can be given to the owner’s opinion of value.It is not based upon proper elements and a proper foundation.It is a methodology that is not recognized as an appraisal for determining fair market value of real estate for ad valorem tax purposes.Missouricourts 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. Div. 2 1974).
Furthermore, Complainant’s Exhibits A:11 and A:12 rebut the claim of a fair market value of only $95,180.Mr. Miller’s own evidence establishes that the fair market value in both 2005, before the change of the screened porch to a sunroom and after that change in 2006 was $112,000 and $123,000.Complainant did not meet his burden of proof on his claim of overvaluation.
In order to obtain a reduction in assessed value based upon discrimination, the Complainant must establish the assessment ratio for the property under appeal and the average assessment ratio for residential property in BartonCounty. Koplar v. State Tax Commission, 321 S.W.2d 686, 690, 695 (Mo. 1959).Evidence of value and assessments of a few properties does not prove discrimination.Substantial evidence must show that all other property in the same class, generally, is actually undervalued.State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964).The difference in the assessment ratio of the subject property and the average assessment ratio in the subject county must be shown to be grossly excessive.Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).No other methodology is sufficient to establish discrimination.Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696 (Mo. 1958).
Complainant’s evidence did not establish that the assessment ratio of the subject was greater than 19% (the assessment ratio applied to the subject) or the average assessment ratio for Barton County residential property.Nor did Complainant prove that the Barton County average residential assessment ratio was less than 19%. The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in Barton County must demonstrate a disparity that is grossly excessive.Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).
Complainant’s discrimination claim fails because of the failure to establish the market value of the property under appeal.Without establishing market value, Mr. Miller cannot establish the assessment ratio for his property.Without establishing the ratio on the subject property, it cannot be establish that the subject property was being assessed at a higher percentage of market value that any other property.
However, even if Complainant had established market value for his property, the discrimination claim would still fail because he did not demonstrated that a statistically significant number of other residential properties withinBartonCountyare being assessed at a lower ratio of market value than the property under appeal.The taxpayer’s claim of discrimination is based upon data for past years on five properties.None of the data establishes that any of the properties were being assessed at a ratio less than 19%.Data from years other than 2007 does not establish assessment ratio for 2007.Data on five properties does not constitute a statistically significant sample forBartonCountyresidential properties.
Complainant did not meet his burden of proof to establish discrimination in the assessment of his property.
Respondent Proves Value
Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2007, to be $116,980, based upon the Hunnicutt Mass Appraisal System. Revised Property Record Card on Subject.The Hearing Officer has an obligation to correct any erroneous assessment.The assessment of the subject property for 2007 omitted new construction and improvement which had occurred in 2006, but which had been missed by the ordinary field review.This was due to the fact that the screened porch which was converted to a sunroom was located at the back of Complainant’s home and could not be viewed and inspected without the Assessor’s staff having go upon the property and around to the back of the home.The added value of this 2006 improvement must be accounted for in the 2007-08 assessment.Accordingly, the value of $116,980 is adopted as the true value in money for the Miller property as of
January 1, 2007.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forBartonCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2007 and 2008 is set at $22,230.
Complainant may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission and an order to the Collector to release and disburse the impounded taxes.§139.031.3, RSMo.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Barton County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 February 26, 2008.
TATE TAX COMMISSION OFMISSOURI
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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 26thday of February, 2008, to:Michael Miller, 1102 E. 19th Street, Lamar, MO 64759, Complainant; Steven Kaderly, Prosecuting Attorney, 114 W. 10th, Lamar, MO 64759, Attorney for Respondent; Ivan Frieden, Assessor, 1004 Gulf, Room 109, Lamar, MO 64759; Kristina Crockett, Clerk, 1004 Gulf, Room 104, Lamar, MO 64759; Frances Cato, Treasurer and ex officio Collector, 1005 Gulf, Room 101, Lamar, MO 64759.