State Tax Commission of Missouri
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MIJON IV LC, |
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Complainant, |
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v. |
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Appeal Number 07-10895 |
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JAKE ZIMMERMAN, ASSESSOR, |
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ST. LOUIS COUNTY, MISSOURI, |
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Respondent. |
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DECISION AND ORDER
HOLDING
St. Louis County Board of Equalization’s assessment SET ASIDE.Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in money and assessment ratio for the subject property for tax year(s):
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True Value 2007-2008 |
Assessment Ratio |
Assessed Value |
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$1,940,000 |
29.4% |
$570,360 |
Complainant appeared by counsel, Thomas Campbell.Respondent appeared by Attorney Edward Corrigan.
Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
Complainant appeals, on the grounds of overvaluation and discrimination, the decision of the County Board of Equalization.Having considered all of the competent evidence upon the whole record, the Hearing Officer finds that the Complainant failed to present substantial and persuasive evidence as to overvaluation, however, the Complainant presented substantial and persuasive evidence as to discrimination.The following Decision and Order is entered.
FINDINGS OF FACT
1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the County Board of Equalization.
2.Schedule and Procedure.On May 7, 2013, the State Tax Commission issued an Order setting forth the schedule and procedures for this appeal.The Schedule and Procedure required that each party file and exchange exhibits and written direct testimony to establish their case in chief on or before October 1, 2013.Complainant filed and exchanged the exhibits set out below under Complainant’s Evidence.Respondent did not file and exchange exhibits or written direct testimony.Respondent had until December 23, 2013, to file objections and rebuttal exhibits.Respondent did not submit objections to Complainant’s exhibits or submit rebuttal exhibits.On January 9, 2013, Respondent requested the appeal be submitted on exhibits.
3.Subject Property.The subject property is identified by map parcel number: 10L340142 and is further identified as 123 James McDonnell Blvd, St. Louis, Missouri.
4.Assessment.The Assessor appraised the property at $1,976,700, an assessed commercial value of $632,540.The Board of Equalization sustained the value.
5.Complainant’s Evidence.Complainant filed with the Commission the following documents:Exhibit A – Appraisal, Exhibit B – Written Direct Testimony of John Hottle.
6.Median Level of Assessment.The State Tax Commission previously found that the median level of assessment for commercial property in St. Louis County in 2007 is 29.4%.The previous decision is incorporated by reference.
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.[1]
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.[2]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.[3]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[4]
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.[5]True value in money is defined in terms of value in exchange and not value in use.[6]It is the fair market value of the subject property on the valuation date.[7]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.[8]
Mr. Hottle conducted an appraisal of the property under appeal consistent with this standard.
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.[9]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 he 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.[10]The Hearing Officer is persuaded that the valuation presented in the appraisal is based upon appropriate and sound appraisal practice and therefore constitutes substantial and persuasive evidence to establish the value concluded of $1,940,000.
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.[11]Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[12]The appraiser appraised the property developing the sales comparison approach.The methodology utilized was appropriate for the appraisal problem presented in the present appeal.
Complainant Proves Value
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.[13]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.”[14]A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.The appraisal reviewed sales of comparable properties.
The appraiser concluded a value of $1,940,000.
The Complainant’s appraisal evidence meets the required evidentiary standard to rebut the presumption of correct assessment by the Board and to establish the true value in money as of January 1, 2007, of the subject property.
Issuance of Decision Absent Evidentiary Hearing
The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, correcting any assessment which is unlawful, unfair, improper, arbitrary or capricious.[15]The filing of exhibits and written direct testimony establishes the basis upon which opportunity for an evidentiary hearing can be held.The Complainant has the burden to present substantial and persuasive evidence.The Respondent did not file any rebuttal exhibits. The Respondent may have cross examined the Complainant’s expert and was provided with an opportunity to notify the Hearing Officer that they wished to cross examine the expert witness.
Since Respondent voluntarily waived cross examination and presenting any rebuttal evidence, an evidentiary hearing would serve no purpose.Accordingly, the responsibility of the Hearing Officer, as has been addressed above, was to simply consider the exhibit and testimony filed and then proceed to ascertain if said exhibit met the standard of substantial and persuasive evidence to establish the market value of the property.
Discrimination
In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of their property on January 1, 2007; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction or show that the level of an assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment. [16]
There is no evidence that there was an intentional plan of discrimination by the assessing officials so we must determine if the Complainant has presented substantial and persuasive evidence to show that the level of their assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment.“By requiring that the level of an assessment be so grossly excessive as to be inconsistent with an honest exercise of judgment in cases in which intentional discrimination is not shown, the courts and the Commission refrain from correcting assessments which reflect no more than de minimus errors of judgment on the part of assessors. Such a standard recognizes that ‘[w]hile practical uniformity is the constitutional goal, absolute uniformity is an unattainable ideal’.” [17]
In a discrimination case, the Commission evaluates the difference between the average level of assessment for a particular class of real property and the actual assessment imposed on the property of the taxpayer alleging discrimination.[18] The Commission has held that the average level of assessment for commercial properties in St. Louis County in 2007 was 29.4%. [19] To prevail and be entitled to a remedy in a discrimination case, the taxpayer must show that the differential between the Assessor’s assessment on the taxpayer and the average level of assessment is grossly excessive.The subject property’s assessed value as determined by the Assessor was $1,976,700 using an assessment ratio of 32%.The subject property’s assessed value using the true value of the property of $1,940,000 and a median assessment ratio of 29.4% is $570,360.The difference between the assessed values is $62,180.The subject property was assessed at 33% of its true value.
The Complainant has established that the assessment was more than a de minimus error in judgment on the part of the assessor and thereby established their right to have his “assessment reduced to the percentage of that value at which others are taxed…”[20] in other words, the taxpayer’s assessed valuation should be set at the assessment “placed upon the general mass of other taxable property in the county.”
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.The assessed value for the subject property for tax years 2007 and 2008 is set at $570,360.
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. [21]
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 18, 2014.
STATE TAX COMMISSION OFMISSOURI
Maureen Monaghan
Hearing Officer
[4] 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)
[5] 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).
[6] 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).
[8] 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.
[9] St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
[10] St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
[11] 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).
[12] 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).
[14] 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).
[16] Savage v. State Tax Commission, 722 S.W.2d 72 (Mo. banc 1986); Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003.)