STATE TAX COMMISSION OF MISSOURI
|PAMELA SUE SPRUNG,||)||Appeal No. 21-20123|
|)||Parcel/locator No(s): 01900|
|MICHAEL DAUPHIN, ASSESSOR,||)|
|CITY OF ST. LOUIS, MISSOURI,||)|
DECISION AND ORDER
Pamela Sue Sprung (Complainant) appeals the City of St. Louis Board of Equalization’s (BOE) decision finding the assessed value of the subject residential property was $62,430 as of January, 1, 2021. The assessed value equates to a true value in money (TVM) of $328,579. Complainant alleges overvaluation and asserted in her Complaint for Review that the assessed value of the subject property on January 1, 2021, was $45,000, a TVM of $236,842. At hearing Complainant testified that she believed the property had a TVM of around $200,000, with an assessed value of around $38,000. Complainant did not produce substantial and persuasive evidence of overvaluation.
Respondent asserts the TVM was $284,800 based on an appraisal performed by Mr. Antikam Mason. The BOE decision is set aside. The TVM of the subject property on January 1, 2021, was $284,800, with an assessed value of $54,112.
The evidentiary hearing was held on July 7, 2022, via Webex. Complainant appeared pro se. Respondent was represented by counsel William Willis. The appeal was heard and decided by Senior Officer Benjamin C. Slawson.
FINDINGS OF FACT
- Subject Property. The subject property is located at 4727 Westminster Place, St. Louis City, Missouri. The property consists of a 3,237 square foot three-story home built in 1905. Complainant testified that the house has six bedrooms and three bathrooms. Complainant purchased the property in 1974. Complainant has not made any significant improvements to the property in the last three years, nor has Complainant listed the property for sale in the last three years. Complainant has not obtained a formal appraisal for the property in the last three years.
- Respondent and BOE. Respondent determined that the assessed value on January 1, 2021, was $63,900, a TVM of $336,315. The BOE independently determined the assessed value on January 1, 2021, was $62,430, a TVM of $328,579.
- Complainant’s Evidence. Complainant testified that she believes the TVM of the subject property on January 1, 2021, was $200,000, with an assessed value of $38,000. Complainant stated that she arrived at this amount by reviewing comparable sales in her block and neighborhood. Complainant did not specifically list or identify any of these comparables. Complainant testified that the house has structural problems and is in need of repair. Because of the age of the home, Complainant asserted that the house needs a major renovation, including a new heating and cooling system. Complainant stated that the house does not currently have central air conditioning or a garage.
Complainant introduced Exhibit A, a 62 page document consisting of Complainant’s obtained bids for needed improvements to the property, including bids for flooring upgrades, updating the heating and cooling system, and replacing the windows. Complainant said the total amount of these estimates is around $165,000. Complainant testified that she presented most of these conditions to the BOE. Respondent objected to Exhibit A solely on the grounds that the Exhibit had not been pre-filed on or before the deadline contained in the scheduling order. The objection was overruled and Exhibit A was admitted into evidence.
In Exhibit A, Complainant also included pictures of the subject property showing the deteriorated condition of the front steps, kitchen, basement stairs and walls, electrical system, and other features and systems in the home. Complainant has not obtained a formal appraisal for the property in the last three years. However, Complainant testified that realtors have informed her that the house is a “gut rehab.” She added that realtors have told her that while the property has “good bones,” it needs a major renovation.
Complainant testified that she is not a licensed appraiser in the state of Missouri.
- Respondent’s Evidence. Respondent introduced Exhibit 1. Complainant did not object. Exhibit 1 was admitted into evidence.
Exhibit 1 is an appraisal report prepared by Antikam Mason, a Real Property Appraiser I in Respondent’s office. Mr. Mason has worked as an appraiser for Respondent for eight years, and his duties include conducting appraisals for Respondent for the purposes of obtaining a TVM for ad valorem tax assessment. Mr. Mason performed an exterior inspection of the home on April 3, 2022, and testified that he received information from Complainant including identification of the condition issues with the property, and pictures and bids regarding these needed repairs. Mr. Mason testified that he took these condition issues into account when reaching his opinion of value. Mr. Mason utilized the sales comparison approach to estimate the January 1, 2021, market value of the subject property. Mr. Mason concluded the market value was $284,800 and used his appraisal analysis in Exhibit 1 to support this conclusion.
- Value. The TVM of the subject property on January 1, 2021, was $284,800, with an assessed value of $54,112.
CONCLUSIONS OF LAW
- Assessment and Valuation
Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is 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. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).
The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. For this reason, the comparable sales approach is typically used to value residential property. “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 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.
The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012). “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020). 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. 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
The BOE’s valuation is presumptively correct. Rinehart v. Laclede Gas Co., 607 S.W.3d 220, 227 (Mo. App. W.D. 2020). To prove overvaluation, a taxpayer must rebut the BOE’s presumptively correct valuation and prove the “value that should have been placed on the property.” Snider, 156 S.W.3d at 346. The taxpayer’s evidence must be both “substantial and persuasive.” Id. “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage, 722 S.W.2d at 77 (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”). A taxpayer does not meet his burden if evidence on any essential element of his case leaves the STC “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. 1980).
- Complainant Did Not Prove Overvaluation.
Complainant’s testimony and other evidence alleges the subject property’s value is $200,000. Complainant’s argument in support of this value is that the property’s condition is in need of a major renovation, has condition issues, and that other sales in the subject property’s area show that the subject property is overvalued.
Complainant did not produce substantial and persuasive evidence rebutting the presumptively correct BOE value. Even if Complainant had rebutted the presumption of correct valuation by the BOE, Complainant has not proven that the TVM of the subject property is $200,000 as of January 1, 2021. Complainant did not produce evidence supporting a comparable sales approach, income approach, or cost approach to value. The lack of evidence relating to a recognized valuation method renders Complainant’s proposed value speculative and unpersuasive. See Cohen, 251 S.W.3d at 349 (holding an opinion of value loses probative value when based on an improper foundation). While Complainant referred to comparable sales, none were identified. Complainant did not produce substantial and persuasive evidence showing the BOE overvalued the subject property and “the value that should have been placed on the property.” Tibbs, 599 S.W.3d at 7.
Although not required given the burden of proof, Respondent presented testimony of Mr. Antikam Mason which persuasively supports a valuation of the subject property of $284,800. Utilizing the sales comparison approach to estimate the market value of the subject, Mr. Mason examined three sales of comparable properties which occurred in 2020. The comparable properties are all located within about a mile of the subject property. The comparable properties are similar to the subject property with respect to location, age, and living space square footage. The comparable properties differ from the subject property with respect to some features and the condition of the home. Mr. Mason asserted that Comparable 1 was the most similar to the subject property. Further, Complainant’s evidence of the condition of the property was taken into account in the property comparison analysis done by Respondent’s appraiser. Mr. Mason made market-based adjustments to these comparables to obtain a TVM of $284,800 for the subject property. Respondent produced persuasive and substantial evidence to set aside the BOE valuation of the subject.
CONCLUSION AND ORDER
The BOE decision is set aside. The TVM of the subject property as of January 1, 2021, was $284,800, with an assessed value of $54,112.
Application for Review
A party may file with the Commission an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person 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.
The Collector of the City of St. Louis, and 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.
SO ORDERED October 7, 2022.
STATE TAX COMMISSION OF MISSOURI
Benjamin C. Slawson
Senior Hearing Officer
State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on October 7, 2022.
Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
 Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal. Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.