Partel Broadband Telecommunications v. Huitt (Wayne

State Tax Commission of Missouri

 

PARTEL BROADBAND, )

TELECOMMUNICATIONS, INC. )

)

Complainant, )

)

v. ) Appeal No. 10-92500

)

FRANCES HUITT, ASSESSOR, )

WAYNE COUNTY, MISSOURI, )

)

Respondent. )

 

 

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

 

On January 18, 2013, Senior Hearing Officer W.B. Tichenor entered his Decision and Order (Decision) affirming the assessment by the Wayne County Board of Equalization

Complainant filed an Application for Review of the Decision on February 19, 2013. Respondent did not respond.

CONCLUSIONS OF LAW

Standard Upon Review

A party subject to a Decision and Order of a hearing officer with the State Tax Commission may file an application requesting the case be reviewed by the Commission. The Commission may then summarily allow or deny their request. The Commission may affirm, modify, reverse or set aside the decision. The Commission may take any additional evidence and conduct further hearings.^[1]

Complainant’s Claims of Error

Complainant puts forth the following alleged errors in the Decision by the Hearing Officer:

1.                  The Hearing Officer erred in not finding for the Complainant as the Respondent did not cross examine or challenge their evidence;

2.                  The Hearing Officer erred in requiring the parties to submit their evidence and not providing an opportunity for hearing;

3.                  The Hearing Officer erred in not making a determination for tax years 2007, 2008, 2009 and 2011; and

4.                  The Hearing Officer erred in ruling that no evidence as to the market value of the property as of January 1, 2010 was presented.

Discussion and Rulings

The Commission will address each of the points raised by Complainant.

Complainant’s Burden of Proof

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.^[2] It places the burden of going forward with substantial evidence on the taxpayer – Complainant. In the present appeal, the presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the County’s assessments are erroneous and what the correct classification that should have been placed on the properties.^[3]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.^[4] 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.^[5]

The Hearing Officer found that the Complainant failed to present substantial and persuasive evidence. In fact, the Hearing Officer found that the Complainant presented no evidence as to the market value of the property as of January 1, 2009 or as to the classification of the properties. The Hearing Officer found that the exhibits presented addressed the delinquent taxes for years 2007, 2008, 2009 and 2011 and that issue was not before the Hearing Officer.

Filing of Exhibits

The Hearing Officer held several pretrial hearings with the parties and issued many orders directed to the Complainant for the filing of required documents throughout the proceedings. On September 26, 2012, the Hearing Officer ordered the Complainant to submit all exhibits to be used by the Complainant in their case in chief to establish the grounds for the appeal. The Hearing Officer further ordered that the direct testimony be submitted in writing to the Hearing Officer. The Hearing Officer extended the deadlines for the Complainant for the filings.

On December 16, 2012, after the deadline for all filings passed, the Hearing Officer issued an order as to the proceedings of the hearing. The Complainant’s case in chief had been submitted. The Respondent filed no exhibits or written direct testimony. A hearing would have provided the opportunity for the Respondent to cross-examine the Complainant’s witnesses. The Respondent waived their right to cross examination.

The Hearing Officer took the case under advisement based upon the Complainant’s exhibits and testimony of their witnesses.

The Hearing Officer provided the parties with an opportunity to present their evidence and testimony of witnesses.

Tax Years 2007, 2008, 2009, and 2011

The State Tax Commission’s jurisdiction and authority for an appeal filed in 2010 was the valuation and classification as applied to the property in 2010. The Commission had no authority to act upon prior tax years or future tax years that are not within the assessment cycle.

Section 138.430, RSMo provides that the owner has the right to appeal within thirty days following the final action of the county concerning all questions and disputes involving the assessment against such property, the correct valuation to be placed on such property, the method or formula used in determining the valuation of such property, or the assignment of a discriminatory assessment to such property. The State Tax Commission does not have authority to hear an appeal filed outside of the proscribed time standards.

Market Evidence

The Complainant provided no evidence as to market evidence of the property. The Complainant submitted Exhibits lettered A to R. Many of the Exhibits did not pertain to the 2010 assessment:

 

Exhibits submitted relating to the 2010 assessment provided no information as to the market value of the property as of January 1, 2009:

 

Exhibits Q and R are the only remaining exhibits that might have provided the Hearing Officer with evidence as to the issues before him. The Hearing Officer thoroughly reviewed the Exhibits and entered written findings, said findings are incorporated by reference as if fully set out in this opinion. The Hearing Officer found that the evidence presented failed to provide information or basis upon which a determination of a classification or valuation for the subject properties for tax year 2010 could be concluded that is different than the classification and assessed values set by the Assessor. The testimony included settlement negotiations, matters for tax years other than 2010, and other inappropriate and irrelevant material.

The Complainant argues the purchase of the property in 2008 should be considered. It has been established that evidence of an actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase, not too remote in time or involving intangibles. In this case, according to the Complainant, the sale involves the intangible of cash flow.

DECISION

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.^[7]

The Hearing Officer did not err in his determinations as challenged by Complainant.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision is AFFIRMED. The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is incorporated by reference, as if set out in full, in this final decision of the Commission.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.

If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of 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.

SO ORDERED April 24, 2013.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Randy B. Holman, Commissioner

Victor Callahan, Commissioner

DECISION AND ORDER

 

HOLDING

 

The assessments made by the Assessor are AFFIRMED.

Complainant failed to present substantial and persuasive evidence to establish the valuations or classification of the properties under appeal.

Assessed values for the subject properties for tax year 2010 are set as commercial real property at the values established by the Assessor.

Complainant represented by Counsel, Rocky Kingree, Van Buren, Missouri.

Respondent represented by Robert M. Ramshur, Wayne County Prosecuting Attorney.

Case decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

Complainant appealed, on the ground of misclassification, the assessment made by the Assessor. The Commission takes this appeal to determine the correct assessment for the subject properties on January 1, 2009.[8] The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FINDINGS OF FACT

1. Jurisdiction. By Order issued December 19, 2011, the Hearing Officer overruled Respondent’s Motion to Dismiss and assumed jurisdiction to address the issue of the classification of Complainant’s property.

2. Order to Show Cause. By Order issued September 26, 2012, Complainant was ordered to show cause why the subject property not be assessed for tax year 2010 in accordance with a BENCH ORDER, issued 8/15/12 by the Hearing Officer. Complainant was to file exhibits and written direct testimony to address the issue of value for tax year 2010.

3. Response to Order to Show Cause. Complainant made response by submitting Exhibits A – P and Written Direct Testimony of two witnesses. No response was made as to why valuation and classification should not be addressed and concluded as per the recommendation made in the 9/15/12 BENCH ORDER. The failure of Complainant to make said response is deemed to have been a rejection of the proposal made as to valuation and classification of the subject property in said ORDER.

4. Evidentiary Hearing. The Evidentiary Hearing was set for 11:00 a.m., Tuesday, December 18, 2012 at the Wayne County Courthouse, Greenville, Missouri.[9] The Evidentiary Hearing was for the sole purpose of permitting cross-examination of Complainant’s witnesses. Respondent’s Counsel waived cross-examination of Complainant’s witnesses via email, 12/6/12 12:35 PM. By BENCH ORDER, dated 12/10/12, the Evidentiary Hearing was cancelled. Appeal decided upon Complainant’s Exhibits.

5. Subject Property. The subject property (Complainant’s telecommunication assets) consists of five real estate parcels identified and assessed as follows:[10]

 

6. Tax Year Presented In Appeal. The Commission does not have before it any appeals for tax years 2007, 2008, 2009, or 2011. The only tax year that is the subject of this appeal is 2010. Therefore, all exhibits and testimony relating to any tax year other than 2010 are irrelevant as being outside the scope of this appeal.

7. Complainant’s Exhibits. Complainant filed the following exhibits:

 

 

8. Findings on Exhibits.

A. Exhibits A, B, C, D, and P are irrelevant as they are not probative on any material fact related to the 2010 assessment of the subject properties, nor do said Exhibits provide any information or basis upon which a determination of a classification or valuation for the subject properties can be concluded that is different than the classification and assessed values set by the Assessor.

B. Exhibits E, F, G H & I are irrelevant as to information for tax years 2008, 2009 and 2011 as they are not probative on any material fact related to the 2010 assessment of the subject properties.

C. Exhibits E, F, G H & I are not probative as to Complainant’s claims of misclassification and overvaluation for tax year 2010, as said Exhibits provide no information or basis upon which a determination of a classification or valuation for the subject properties can be concluded that is different than the classification and assessed values set by the Assessor.

D. Exhibits J, K & L are irrelevant as they are not probative on any material fact related to the 2010 assessment of the subject properties, nor do said Exhibits provide any information or basis upon which a determination of a classification or valuation for the subject properties can be concluded that is different than the classification and assessed values set by the Assessor.

E. Exhibits M, N & O are irrelevant as they are not probative on any material fact related to the 2010 assessment of the subject properties, nor do said Exhibits provide any information or basis upon which a determination of a classification or valuation for the subject properties can be concluded that is different than the classification and assessed values set by the Assessor. The fact that for some cable telephony companies only personal property was listed and for other both real and personal property was listed in the State Tax Commission report provides no relevant evidence as to either the valuation or classification of the subject properties. Complainant’s evidence failed to establish that the Complainant and the subject properties fell within the description of Cable Telephony Companies.

F. Questions and Answers 1 through 16 of Exhibit Q constitute simply background information and do not address the matter of the valuation or classification of the subject properties for tax year 2010.

G. Questions and Answers 17 through 48 of Exhibit Q are irrelevant as the testimony relates to Exhibits which have been found to be irrelevant. In addition, the testimony is not probative on any material fact related to the 2010 assessment of the subject properties, nor do said Exhibits provide any information or basis upon which a determination of a classification or valuation for the subject properties can be concluded that is different than the classification and assessed values set by the Assessor.

H. Question and Answer 49 of Exhibit Q is without foundation that the witness possesses the education, training and experience to draw any conclusion or offer any opinion of the matter testified to in the Answer. Furthermore, the answer fails to provide any information or basis upon which a determination of a classification or valuation for the subject properties for tax year 2010 can be concluded that is different than the classification and assessed values set by the Assessor.

I. Questions and Answers 50 through 58 of Exhibit Q are irrelevant as they address attempted settlement negotiations apparently undertaken by the witness with

Respondent. Nothing contained therein establishes any material fact as to the valuation or classification of the subject properties for tax year 2010.

J. Questions and Answers 1 through 8 of Exhibit R constitute simply background information and do not address the matter of the valuation or classification of the subject properties for tax year 2010.

K. Questions and Answers 9 through 16 of Exhibit R relate to the 2007 purchase of the Wayne County cable television system. They are not relevant as they provide no information upon which a determination of valuation or classification of the subject properties for tax year 2010 could be made.

L. Questions and Answers 17 through 21 of Exhibit R are irrelevant as the testimony relates to an Exhibit which has been found to be irrelevant. Furthermore, the testimony is without foundation that the witness possesses the education, training and experience to draw any conclusion or offer any opinion of the matter testified to in the Answer. In addition, the answers fail to provide any information or basis upon which a determination of a classification or valuation for the subject properties for tax year 2010 can be concluded that is different than the classification and assessed values set by the Assessor.

M. Questions and Answers 22 through 35 of Exhibit R are irrelevant as the testimony addresses matters in Exhibits which have been found to be irrelevant. Furthermore, the testimony relates to matters for tax years other than 2010 and therefore is beyond the scope of this appeal.

N. Questions and Answers 36 through 44 of Exhibit R are irrelevant as the testimony provides no information or basis upon which a determination of a classification or

valuation for the subject properties for tax year 2010 can be concluded that is different than the classification and assessed values set by the Assessor.

O. Questions and Answers 45 through 47 of Exhibit R are irrelevant as they do not relate to the 2010 tax year and provide no information or basis upon which a determination of a classification or valuation for the subject properties for tax year 2010 can be concluded that is different than the classification and assessed values set by the Assessor.

P. Questions and Answers 48 through 53 of Exhibit R are irrelevant as they address attempted settlement negotiations apparently undertaken by Jerry Whitlow with Respondent. Nothing contained therein establishes any material fact as to the valuation or classification of the subject properties for tax year 2010.

R. Question and Answer 54 of Exhibit R is irrelevant as it addresses matters relating to tax years other than 2010, said matters being beyond the scope of this appeal, and the testimony provides no information or basis upon which a determination of a classification or valuation for the subject properties for tax year 2010 can be concluded that is different than the classification and assessed values set by the Assessor.

9. Complainant Failed To Meet Burden Of Proof. There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[12] Complainant’s evidence was not substantial and persuasive to establish the true value in money or classification of the subject properties as of January 1, 2009. See, Complainant’s Burden of Proof, infra.

10. Respondent’s Evidence. Respondent had no burden of proof in the appeal and was under no obligation to present any evidence.

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.[13]

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.[14] True value in money is defined in terms of value in exchange and not value in use.[15] It is the fair market value of the subject property on the valuation date.[16] 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.[17]

 

Complainant presented no evidence upon which a determination of fair market value (true value in money) could be concluded for any of the properties under appeal.

Complainant’s Burden of Proof

In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value and or classification is indicative of the market value of the subject property on January 1, 2009.[18] There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal 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.”[19]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[20] 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.[21]

Complainant presented no opinion of value as of January 1, 2009, for the subject properties individually or collectively. Complainant presented no evidence that addressed the issue of classification of the properties. The exhibits filed are deemed to be irrelevant on the issue of the value or classification of the subject properties for tax year 2010. The entire thrust of Complainant’s case sought to address the issue of its delinquent taxes for years 2008 and 2009. That issue is not before the Commission and can be no part of any decision in this appeal.

Complainant failed to meet its burden of proof. Accordingly, the assessments for tax year 2010 must remain as determined by the Assessor.

ORDER

The assessed valuations for the subject properties as determined by the Assessor for Wayne County for the subject tax day are AFFIRMED.

The assessed values for the subject properties for tax year 2010 are set as follows:

 

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. [22]

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 January 18, 2013.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Senior Hearing Officer