STATE TAX COMMISSION OF MISSOURI
|MONARCH TREE FARM, LLC,||)|
|v.||)||Appeal No. 15-10101|
|JAKE ZIMMERMAN, ASSESSOR||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
The assessment made by the Board of Equalization of St. Louis County (BOE) is AFFIRMED. Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Monarch Tree Farm, LLC (Complainant) appeared by counsel Rick Stout.
Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel Ed Corrigan.
Case heard and decided by Hearing Officer Maureen Monaghan (Hearing Officer).
Complainant appealed on the ground of misclassification and misgraded agriculture. No evidence was presented as to the grade of the parcel and therefore that claim is deemed abandoned. The State Tax Commission (STC) takes this appeal to determine the proper classification of the property and the appropriate productivity value (grade) of the subject property on January 1, 2015.
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 proper. Complainant timely appealed to the STC.
- Evidentiary Hearing. The evidentiary hearing occurred on March 31, 2017, at the St. Louis County Administrative Building, St. Louis County, Missouri.
- Identification of Subject Properties. The subject property is identified by parcel or locator number 18W120077, 108 North Eatherton in St. Louis County.
- Description of Subject Properties. The subject property is over 14 acres of property improved with a residential structure and a storage building.
- Assessment. Respondent set a TMV for the subject property of $214,900. The property was deemed a mixed use parcel of commercial (TMV of $148,800) and agriculture (TMV of $66,100).
- Board of Equalization. BOE made a determination of TMV for the subject property of $214,900. The property was deemed a mixed use parcel of commercial (TMV of $148,800) and agriculture (TMV of $66,100).
- Complainant’s Evidence.
To support their opinion of classification, Complainant offered as evidence the following:
|A||Photograph of the property in 1999|
|B||Photograph of the property in 2009|
|C||Letter from City of Chesterfield regarding zoning|
|D||BOE and Respondent’s Decision 2007|
|E||Stipulation for 1999|
|G||Written Direct Testimony of James Meiners|
James Meiners testified on behalf of Complainant. He is a member of Monarch Tree Farm LLC. Monarch Tree Farm LLC grows trees, shrubs and perennials for use by Prestige Lanscape, Inc. He is the President of Prestige Landscape, Inc. The primary purpose of both businesses is landscaping.
Plants needed for installation in the landscape business are grown and cared for at the subject parcel. Few sales of trees and shrubs occur at the subject property as they maintain no open business hours for “walk-in” business. In 2015, only $40,000 in sales was derived from walk-in customers.
During cross-examination, the witness testified to the depiction in the 2015 aerial photo of the parcel. A residence on the property is used as a business office. Another building found on the subject property is used to store supplies and irrigation piping, house trucks, house a break room for employees, and hold plants during cold weather. Most of the land is used to grow trees. A section of the property is used for “hardscape” supplies – blocks, rocks, etc used for retaining walls and other hardscape features they install for landscape customers.
Complainant submitted an Order approving the Stipulation of the Parties in STC Appeals 99-10243 and 99-10244. Appeal 99-10243 was dismissed. In Appeal 99-10244, the parties agreed to an assessed valuation of $12,340 (agricultural) for tax years 1999-2000. Complainant submitted a BOE Decision from 2007-2008 in which the BOE lowered the value from $214,500, agricultural classification, to $136,500, agricultural classification.
Counsel for Complainant requested official notice of STC Appeal 11-11011 where the parties entered into a stipulation for the assessment of the parcel for tax years 2011-2013. The STC approved the stipulation of the parties.
- Respondent’s Evidence.
To support their opinion of classification, Respondent offered as evidence the following:
|7||Written Direct Testimony of David Winkler|
- Presumption of Correct Assessment Not Rebutted.
Evidence presented was not substantial and persuasive to rebut the presumption of correct assessment by the BOE and to establish the classification of the entire parcel as agricultural or alter the grade of the parcel.
CONCLUSIONS OF LAW AND DECISION
The STC has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement. The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the BOE, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
Burden of Proof
A presumption exists that the assessment by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. 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).
There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC 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.” Westwood Partnership, 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. W.D. 1991).
Under Missouri statutory law, property shall be classified as agricultural and horticultural property when “real property [is] used for agricultural purposes and devoted primarily to the raising and harvesting of crops . . .” Section 137.016.1(2) RSMo. The classification is determined by the actual use put to the property. Northtown Village v. Don Davis, Assessor, Jasper County. Mo., Appeal Nos. 03-62558 (May 27, 2004)[ providing that the definitions in Section 137.016 (2000) illustrate that “the classification turns on the actual use put to the property.] Cutting hay is an agricultural activity and such activity is sufficient to cause real property to be classified as “agricultural property”. Dickerson v. Curtis Koons, Assessor, Cass County, Mo. Appeal Number 01-49004 (June 11, 2002); Ernest W. Giddens, Trustee v. Rick Kessinger, Assessor, Greene County, MO., Appeal No. 05-33000 (Commission Decision April 19, 2007).
The subject parcel is classified as mixed use – commercial and agricultural. Complainant sought to have the entire parcel classified as agricultural. Complainant’s use of the property which includes the growing and caring for trees, shrubs and perennials qualifies that portion for agricultural use. However, Complainant failed to establish that the entire parcel was devoted to the raising and harvesting crops. Complainant’s use of the property devoted to “hardscaping”, landscaping business, and the selling of plants was not devoted to the growing and harvesting of a crop.
Complainant failed to establish by substantial and persuasive evidence that the BOE was incorrect in their determination of mixed use of the parcel as agricultural (growing plants) and commercial (business of selling plants and landscaping services).
Complainant also argues that the Stipulation entered into for tax years 1999-2000, the BOE determination from 2007-2008, and the Stipulation for an appeal filed in 2011 are to be considered “successful appeals” as the term is used in Section 137.345 RSMo.:
- In every instance where a taxpayer has appealed to the board of equalization or the state tax commission the assessment of the taxpayer’s property, real or personal, and that appeal has been successful, then in the next following and all subsequent years the basis upon which the assessor must base future assessments of the subject property shall be the basis established by the successful appeal and any increases must be established from that basis.
Stipulations do not constitute “a successful appeal.” “A successful appeal is an appeal where the case is submitted to the Commission and a decision is rendered finding true value in money as the taxpayer proposed and advocated.” Burkemper v. SLCo (2002 WL 561033). Application of Section 137.345.5 RSMo requires:
(1) STC Decision after consideration of evidence;
(2) Application of the appropriate basis (methodology), i.e., cost, sales comparison, or income approach, for the valuing of the property; and
(3) Consideration in light of and under the overarching and controlling mandate to find the fair market value of the property under appeal.
To conclude otherwise ignores the market and inflation or the actual use of the property during the relevant tax year and thereby ignores the requirements of Section 137.115 RSMo requiring properties be assessed at a percentage of true value.
Shipman v. DNS Electronic Materials, Inc., 267 S.W.3d 751 (Mo. App. 2008) the Missouri Court of Appeals stated in pertinent part:
“The plain and ordinary meaning of “basis” as used in section 137.345.5 requires that there be some substantive connection between the valuation of property established through a successful appeal and subsequent assessments of that property. It must be the ‘basis.’ Section 137.345.5 requires that ‘any increases must be established from that basis.”
“The cardinal rule of statutory construction requires the court to ascertain the true intention of the legislature, giving reasonable interpretation in light of the legislative objective. BCI Corporation v. Charlebois Construction Co., 673 S.W.2d 774, 780 (Mo. banc 1984). “If reasonably possible, all provisions must be harmonized.” Bartley v. Special School District of St. Louis County, 649 S.W.2d 864, 867 (Mo. banc 1983). Statutes relating to the same subject matter are considered in pari materia. State ex rel. Director of Revenue, State of Missouri v. Gaertner, 32 S.W.3d 564, 566 (Mo. banc 2000). “The doctrine requires that statutes relating to the same subject matter be construed together even though they are found in different chapters or were enacted at different times. KC Motorcycle Escorts, L.L.C. v. Easley, 53 S.W.3d 184, 187 (Mo. App. 2001). By reading Section 137.345.5 RSMo., Art. X Sections 4(a) and 4(b) of the Missouri Constitution of 1945, Section 137.115 RSMo. and all other pertinent statutes and constitutional provisions in harmony, a settlement, especially one not based upon establishing the true market value of the property or the actual use of the property, does not constitute a successful appeal.
The BOE determination of 2007-2008 is not persuasive as establishing TVM for 2015 as the STC considered the valuation in 2011 and therefore any determination for 2007-2008 is not relevant.
The assessment for the subject property as determined by the BOE is SUSTAINED.
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. Louis 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 May 23, 2017.
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 23rd day of May, 2017, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.