State Tax Commission of Missouri
MO-KAN LIVESTOCK MARKET,)
v.)Appeal Number 04-43000
ROGER PRUDEN, ASSESSOR,)
BATES COUNTY, MISSOURI,)
DECISION AND ORDER
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Complainant has failed to present substantial and persuasive evidence demonstrating that its property should be classified as agricultural rather than commercial property or that the assessor has overvalued its property.The classification and valuation determined by the Board of Equalization, are AFFIRMED.
The issues in this appeal are the proper classification and valuation of a subject livestock auction barn on January 1, 2004.
Complainant appeals the assessment of its livestock auction barn on the grounds of overvaluation and misclassification.Said parcel was originally valued by the Assessor’s office at $820,690 commercial (assessed value $262,620) and $28,580 residential (assessed value $5,430). The Board of Equalization raised value to $947,340 commercial (assessed value $303,580) to include the values of omitted fixtures including pens, gates and overhead walkways and $34,580 residential (assessed value $6,570).Complainant appealed asserting a value for the entire parcel of $615,000 (Ex. A, p. 14).Complainant asserts that the livestock auction barn should be classified as agricultural.
On October 20, 2005, an evidentiary hearing was held before State Tax Commission senior hearing officer Luann Johnson at the Bates County Courthouse in Butler, Missouri.Complainant appeared by Larry Welch, Esq.Respondent was represented by Hugh Jenkins, Esq.
Exhibit A – Appraisal Report of Raymond Haas.
Exhibits B thru G – Photographs of different portions and views of the subject property and improvements.
Exhibit H – Written direct testimony of Jerry Hertzog.
Exhibit I – Written direct testimony of Raymond Haas.
Exhibit 1 – Property Record Card on the subject property.
Exhibit 2 – Copy of 2004 Personal Property declaration for Complainant’s property.
Exhibit 3 thru 7 – Photographs of subject property and improvements.
Exhibit 8 – Aerial photograph of subject property.
Exhibit 9 – Copy of Sections 137.016, 137.075 and 137.080 RSMo.
Exhibit 10 – Copy of letter from Bates County FSA with data sheet.
Exhibit 11 – Copies of newspaper advertisements of Complainant.
Exhibit 12 – Copy of Merchant’s License List.
Exhibit 13 – Written direct testimony of Roger Pruden.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Bates County Board of Equalization.
2.The subject property is a 20.7 acre tract located off Highway 71 at the Passaic exit approximately fifty-five miles south of Kansas City, Missouri.The subject property is level at street grade and slightly irregular in shape.The property is improved with a livestock auction facility and a mobile home.
3.The mobile home is a 27 foot by 40 foot doublewide.It was reported to have been built in 1993 and is considered to be in average condition.
4.The auction barn is steel frame with metal exterior walls and roof.There are six small offices on a portion of the first floor and an office/lounge on the second floor.There is a restaurant occupying approximately 960 square feet of the first floor space, an open hallway and a sales arena with seating.There is a bathroom in the office area and two bathrooms in the arena area.The office area, restaurant, halls and bathroom contain 6,400 square feet on the first level with approximately 400 square feet of finished area on the second level.The auction building is in average to good condition.
5.Attached to the auction building are two open-sided structures which are steel frame with metal roof and open sides.They measure 116 feet x 250 feet and 109 feet by 250 feet and contain 56,250 square feet.
6.Also attached to the auction barn is a 45,000 square foot open holding pen area and a small veterinarian office.
7.The property is further improved with a 5,869 square foot shop/warehouse structure and small attached office estimated to have been built in approximately 1978.The building is considered to be in average condition with a concrete floor and metal exterior walls and roof.
8.The property is further improved with a 2,880 square foot pole frame barn built in 1994 considered to be in above average condition.This structure has a concrete floor with metal exterior walls and roof.
9.On July 14, 2004 the Bates County Board of Equalization made a downward condition adjustment to the building and added the pens, gates and overhead walkways as fixtures to the real property.(Ex. 1, p. 1).
10.At various different times the commercial portion of the property has been used to (1) sell feed; (2) consignment sale of cattle panels or portable corral systems; (3) sell farm machinery, building materials, surplus office furniture and equipment and trucks; (4) hold sales for the Bankruptcy Court; (5) sell exotic animals; (6) hold longhorn sales; (7) hold special cow sales; (8) hold bull sales; (9) hold meeting of the Bates County Cattlemen; and (10) park road equipment.
11.Although he created an income approach for the sale barn, Complainant’s appraiser testified that he placed the most weight on the cost approach to value which resulted in a value of $650,800 under the Marshall Swift cost system.Tr. 28, 33, 34-35. Complainant’s appraiser testified that the value of the pens, gates and feeders were included in his Marshall Swift arena calculations. However, his use of arenas to value the sale barn does not contemplate the extensive pens and fencing present at the subject property. Complainant’s appraiser found no similar sales to use for a sales comparison approach.Complainant’s appraiser testified that he did not actually inspect the facility.Tr. 29.
12.Respondent testified that he used the Hunnicutt cost system to determine value for improvements.He then took the value of the pens, gates, feeders, walkways and other fixtures from Complainant’s business assessment sheet.Tr. 48.Respondent’s approach to value more accurately captures all of the improvements actually existing on the subject property.
CONCLUSIONS OF LAW
Burden of Proof
There is a presumption in favor of the Board of Equalization.Therefore, in order to prevail Complainant must demonstrate, by substantial and persuasive evidence, thatits property was overvalued and misclassified by Respondent.
Substantial evidence is that evidence which, if true, has probative force upon the issues, i.e., evidence favoring facts which are such that reasonable men may differ as to whether it established them, and from which the Commission can reasonably decide an appeal on the factual issues.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).
True Value in Money
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 purchased by one who is desiring 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, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).
Utility, industrial, commercial, railroad and other real property is “all real property used directly or indirectly, for any commercial, mining, industrial, manufacturing, trade, professional, business, or similar purpose . . . .” and “All other real property not included in the property listed in subclasses (1) and (2) of section 4(b) of article X of the Missouri Constitution, as such property is defined in this section, shall be deemed to be included in the term “utility, industrial, commercial, railroad and other real property.”Section 137.016.1(3), RSMo.
Agricultural and horticultural property is “all real property used for agricultural purposes and devoted primarily to the raising and harvesting of crops; to the feeding, breeding and management of livestock which shall include breeding and boarding of horses; to dairying, or any other combination thereof; and buildings and structures customarily associated with farming, agricultural and horticultural uses. . . .”Section 137.016.1(2), RSMo.
Complainant Failed to Prove Misclassification
Complainant argues that using its property to sell livestock qualifies it for an agricultural classification inasmuch as the marketing of livestock is necessarily a part of the management of livestock.The legislature has not specifically designated properties used for the marketing of livestock as agricultural properties.Furthermore, a careful search of Missouri cases has failed to
yield a case which supports Complainant’s position and, indeed, Complainant’s counsel has failed to indicate that such a case exists.
We are instructed to take words in a statute in their plain and ordinary sense.The plain meaning of words, as found in the dictionary, will be used unless the legislature provides a different definition.Lincoln Industrial, Inc. v. Director of Revenue, 515 S.W.3d 462, 465 (Mo. banc 2001).Words cannot be added to a statute under the auspice of statutory construction.Southwestern Bell Yellow Pages, Inc. v. Director of Revenue, 94 S.W.3d 388, 390 (Mo. banc 2002).
The statute provides that property used for the “feeding, breeding and management of livestock” shall be classified as agricultural.Merriam Webster defines “manage” as “to handle or direct with a degree of skill.”Clearly, the legislature is indicating characteristics of animal husbandry – feeding, breeding and managing.There is nothing which suggests that they intend to extend an agricultural classification to marketing through an auction barn.
Complainant has failed to establish that its auction barn has been improperly classified.
Complainant Failed to Prove Overvaluation
Complainant’s appraiser failed to inspect the facility before calculating his opinion of value.And, although conceding that he relied primarily upon the cost approach, he nevertheless proposed a value below that indicated by his cost approach to accommodate his opinion under the income approach.Finally, it is not clear that Complainant’s appraiser was aware of or valued the pens, gates and fences that form a part of the real property.For these reasons, Complainant has failed to present substantial and persuasive evidence indicating that Respondent has overvalued its property.
The assessed value determined by the Board of Equalization, is AFFIRMED.
A party may file with the Commission an application for review of a hearing officer decision within thirty (30) days of the mailing of such decision.The application shall contain specific detailed 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.
If an application for review of a hearing officer 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.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 Bates 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 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 17, 2006.
STATE TAX COMMISSION OF MISSOURI
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid this 17th day of February, 2006, to:Larry Welch, 1400 S. Outer Rd., Suite C, Blue Springs, MO 64015, Attorney for Complainant; Hugh Jenkins, Prosecuting Attorney, P.O. Box 222, Butler, MO 64730, Attorney for Respondent; Roger Pruden, Assessor, 1 North Delaware, Bates County Courthouse, Butler, MO64730; Marlene Wainscott, Clerk, 1 North Delaware, Butler, MO 64730; James Platt, Treasurer, 1 North Delaware, , Butler, MO 64730.