STATE TAX COMMISSION OF MISSOURI
| NEIL & HEATHER GEISLER | ) | |
| ) | ||
| Complainants, | ) | |
| ) | ||
| v. | ) | Appeal No. 18-30006 |
| ) | ||
| GAIL MCCANN BEATTY, ASSESSOR | ) | |
| JACKSON COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessment made by the Board of Equalization of Jackson County (BOE) is AFFIRMED. Complainant Neil Geisler (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the true value in money (TVM) of the subject property as of January 1, 2017.
Complainant Neil Geisler appeared pro se.
Complainant Heather Geisler did not appear
Respondent Gail McCann Beatty, Assessor, Jackson County, Missouri, (Respondent) appeared by Counsel Tamika Logan.
Case heard and decided by Senior Hearing Officer John Treu (Hearing Officer).
ISSUE
Complainants appealed on the ground of overvaluation. Respondent initially set the TVM of the subject property, as residential property, at $504,500. The BOE set the TVM at $504,500. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction or improvement to the property. Section 137.115.1 RSMo The State Tax Commission (STC) takes this appeal to determine the TVM for the subject property as the property existed on January 1, 2017, under the economic conditions as they existed on January 1, 2017.
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. Complainants timely appealed to the State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on October 29, 2018, at the Jackson County Courthouse, Kansas City, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number 73-600-02-16-00-0-00-000. It is further identified as 14205 South Hutt Road, Lone Jack, Missouri. (Complaint; Exhibit 1)
- Description of Subject Property. The subject property consists of a 5 acre residential lot improved by a 3,658 square foot, single-family, two-story home built in 2014. (Exhibit 1) The home includes four bedrooms; three full bathrooms; one half bathroom; a full basement; a three-car attached garage; a covered patio; and a covered cedar deck. The home has a construction quality grade of average/good and a condition of excellent. (Testimony and Exhibit 1)
- Assessment. Respondent set a TMV on the subject property at $504,500 residential, as of January 1, 2017.
- Board of Equalization. The BOE set a TVM on the subject property at $504,500.
- Complainant’s Evidence. Complainant opined that the subject property’s TVM as of January 1, 2017, was $325,000. To support his opinion of value, Complainant offered the following evidence:
| Exhibit | Description | Ruling |
| Exhibit A | BOE Decision for tax year 2015 regarding subject property | Admitted |
| Exhibit B | News Article of April 3, 2018 regarding a proposed animal feeding operation | Admitted |
| Exhibit C | News Article of June 15, 2018 regarding Missouri Department of Natural Resources issuing operating permit for animal feeding operation | Admitted |
| Exhibit D | Current Listings of Properties | Admitted |
| Exhibit E | Photographs of Hail Damage and Stain on Driveway | Admitted |
Respondent’s counsel objected to Exhibits A, B, C, and D. The objection was overruled and the exhibits were admitted to be given the weight appropriate, if any. Respondent’s counsel did not object to Exhibit E.
Exhibit A consists of the BOE Decision as to the value of the subject property for tax year 2015. The BOE set a TVM of $455,000 for the subject property as of January 1, 2015. Exhibit D consist of 14 property listings in Lone Jack, Missouri, with a list price range of $167,000 to $725,000. All of the listings provide bedroom, bathroom and garage information. Some provide square footage while others do not. Some provide lot size while others do not. Of those providing acreage information the acreage ranges from .21 acres (9,583 square feet) to 18 acres. Exhibit E consists of photographs of what Complainant describes as damage to his home from hail and to his driveway from a vehicle stain. The damage occurred in 2018 and appears minor.
Complainant testified in his own behalf. Complainant testified that he had purchased the subject property in 2014. Complainant testified that the purchase price was between $494,000 and $504,000. Complainant testified that no improvements were made to the subject property between January 1, 2017 and January 1, 2018. Complainant testified that hail damage to the roof occurred in 2018. Complainant testified that he is not a licensed appraiser or a license realtor and that he has purchased only three properties with improvements.
In conjunction with the presentation of his exhibits, Complainant argued the subject property may be impacted by an animal feed operation located approximately three miles from the subject property. Complainant testified that he has smelled cattle on a few occasions. Complainant testified he is concerned about runoff from the animal feed operation into the creek where his children play.
- Respondent’s Evidence. Respondent advocated that the BOE’s valuation of the subject property as of January 1, 2017, $504,500, was correct. Respondent offered the following evidence:
| Exhibit | Description | Ruling |
| Exhibit 1 | State Tax Commission 2018 Support Report | Admitted |
Complainant did not object to Respondent’s Exhibit 1, which was received into the record.
Exhibit 1 included three comparable properties, their characteristics and amenities, their original list prices, and sales prices. The comparables sold for $137.11 to $222.73 per square foot. The comparables sold between January 2016 and November 2016. All of the comparables contained 5 acres of land. Exhibit 1 also contains a Certificate of Value sent by the Complainants showing a purchase price of the subject property of $494,942.
Respondent also offered the testimony of Darlene Lackey (Lackey), the Jackson County Assessment Department Residential Appraisal Supervisor. Lackey examined Complainant’s property listings set forth in Exhibit D. Lackey testified that the property listings were not comparable to the subject property. Lackey testified that the comparable properties listed in Exhibit 1 were more appropriately utilized for valuing the subject property.
- Presumption of Correct Assessment Not Rebutted. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.
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, including the application of any abatement. 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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification, or assessment of the property. Section 138.430.2 RSMo (2000) as amended. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties. Id.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
A presumption exists that the assessed value fixed 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, 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).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783. A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.” See Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. E.D. 1980).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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. 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).
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 deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
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, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). 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. 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. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347. “Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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.
Discussion
Complainant’s evidence was neither substantial nor persuasive to support an opinion as to the TVM of the subject property as of January 1, 2017. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion. Id.
Complainant did not present any evidence utilizing one or more of three generally accepted approaches to valuing real property for ad valorem tax purposes. Complainant’s evidence focused on listings of properties, with no adjustments made for square footage, location, age, lot size, condition, quality, bedrooms, bathrooms, and other amenities. Complainant argued that the animal feeding operation located approximately three miles from the subject property could impact the TVM of the subject property; however, Complainant made no argument that there was any impact as of January 1, 2017.
ORDER
The TVM for the subject property as determined by the BOE is AFFIRMED. The assessed value for the subject property for tax years 2017 and 2018 is $98,855 residential ($504,500 TVM).
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
Disputed Taxes
The Collector of Jackson 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 November 20, 2018.
STATE TAX COMMISSION OF MISSOURI
John Treu
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 20th day of November, 2018, to: Complainants(s) counsel and/or Complainants, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator