STATE TAX COMMISSION OF MISSOURI
| Patrick and Charity Miller, | ) | |
| Complainant, | ) | Appeal No. 20-86000 |
| ) | ||
| ) | Parcel No. 2-10-05.0-21-00.0-00-04.001 | |
| v. | ) | |
| ) | ||
| Jim Ward¹, Assessor, | ) | |
| Scotland County, Missouri | ) | |
| Respondent. | ) |
DECISION AND ORDER
Patrick and Charity Miller (Complainants) appeal the Scotland County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2020, was $232,810, with an assessed value of $44,240. Complainants claim the property is overvalued and propose a value of $148,160.[2] Complainants did not produce substantial and persuasive evidence establishing overvaluation. The BOE’s decision is affirmed.[3]
The evidentiary hearing was conducted on August 20, 2021, via WebEx video conference. Complainants appeared pro se. Respondent was represented by counsel April S. Wilson.
FINDINGS OF FACT
- Subject Property. The subject property is located at 21431 CR 504 in Memphis, Missouri. The parcel/locator number is 2-10-05.0-21-00.0-00-04.001.
The subject property consists of a three and one-half acre lot, (Ex. A at 15; Tr. pt. 1 3:00-22), and a 1,890 square foot single family home, (Ex. 3 at 1), that has four or five bedrooms[4] and three full baths, (Ex. 3 at 1; Tr. pt. 1 3:00-22) The subject property also has an “open shop to work in.” (Tr. pt. 1 3:00-22) Mr. Miller previously owned the subject property and had the dwelling on the subject property built in 2006. (Tr. pt. 1 6:20-30) The subject property was previously sold by Mr. Miller to certain purchasers, and purchased back by Complainants from those purchasers in May of 2019 for $300,000. (Tr. pt. 1 6:20-40, 3:24-40)
- Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $232,810. (Ex. A at 15) For the 2020 tax year, Respondent classified the subject property as residential and determined the TVM on January 1, 2020, was $232,810.[5] (Compl. Attach.) The BOE classified the subject property as residential and independently determined the TVM on January 1, 2020, was $232,810. (Compl. Attach.)
- Complainants’ Evidence. Complainants assert the TVM of the subject property for the 2020 tax year was $148,160, based on the previous appraised value of the subject property.[6] Mrs. Miller testified and contends that (1) the value increased 43 percent in one year when no changes had been made to the subject property since it was originally built; (2) she did not receive notice that the taxes were going to significantly increase; and (3) although the value of the subject property was increased after a change of ownership, Complainants’ neighbors’ properties did not increase in value despite changes in ownership. Complainants submitted the following exhibits:
| Exhibit | Description | Ruling |
| A | Scotland County real estate records for the subject property for 2007, 2008, 2009, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, and 2019. | Admitted |
| B | For the subject property, two-page summary report; two-page warranty deed indicating received by the recorder of deeds on May 31, 2019; and one-page exhibit to the warranty deed that lists the legal description. | Admitted |
| C | For parcel number 2-10-05.0-21-00.0-00-03.002, two-page summary report; Scotland County real estate records for 2018, 2019, 2020, and 2021; two-page warranty deed indicating received by the recorder of deeds on September 19, 2019; and one-page exhibit to the warranty deed that lists the legal description. | Admitted |
| D | For parcel number 2-10-05.0-21-00.0-00-11.001, two-page summary report; Scotland County real estate records for 2009, 2019, and 2021; three-page warranty deed indicating recorded October 2, 2006; and two-page quit claim deed indicating filed on June 6, 2007. | Admitted |
| E | For parcel number 2-10-04.1-20-00.0-00-01.001, two-page summary report; Scotland County real estate records for 2018, 2019, 2020, and 2021; two-page quit claim deed indicating recorded on March 10, 2014; and one-page exhibit to the deed that lists the legal description. | Admitted |
| F | For parcel number 2-10-05.0-21-00.0-00-10.000, two-page summary report and Scotland County real estate records for 2012, 2013, 2020, and 2021. | Admitted |
| G | For parcel number 2-10-08.0-28-00.0-00-08.000, two-page summary report and Scotland County real estate records for 2012, 2013, 2015, 2019, and 2020. | Admitted |
| H | For parcel number 2-10-04.2-18-00.0-00-15.000, Scotland County real estate records for 2012, 2013, and 2021. | Admitted |
| I | For parcel number 2-10-05.0-21-00.0-00-07.000, two-page summary report and Scotland County real estate records for 2018, 2019, 2020, and 2021. | Admitted |
Respondent did not object to any of the exhibits, and Exhibits A through I were received into evidence.
- Respondent’s Evidence. Respondent testified and submitted the following exhibits:
| Exhibit | Description | Ruling |
| 1 | Two-page property summary report for parcel number 2-10-04.2-18-00.0-00-15.000 dated June 22, 2021. | Admitted |
| 2 | Two-page property summary report for parcel number 2-10-05.0-21-00.0-00-03.002 dated June 25, 2021. | Admitted |
| 3 | For the subject property, two-page property summary report; email from one of the sellers dated June 25, 2021, indicating that Complainants paid $300,000 for the subject property; and letter from appraiser Margaret Minear to Christine Marlow dated August 13, 2018, indicating that Ms. Minear’s opinion of value as of July 25, 2018, is $295,000. | Admitted |
Complainants did not object to any of the exhibits, and Exhibits 1 through 3 were received into evidence.
- Value. The TVM of the subject property on January 1, 2020, was $232,810, with an assessed value of $44,240.
CONCLUSIONS OF LAW
- Assessment and Valuation. 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. “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.
- Evidence. 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.
- Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued or misclassified. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020). The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous” and must prove “the value that should have been placed on the property.” 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”).
- Complainants Did Not Prove Overvaluation. Complainants did not produce substantial and persuasive evidence establishing that the BOE’s valuation was erroneous and that Complainants’ opinion of value, $148,160, was the TVM of the subject property for the 2020 tax year. Although Mrs. Miller testified that she believes the fair market value of the subject property for the 2020 tax year should remain $148,160, based on Respondent’s previous appraised values, Complainants did not offer evidence persuasively establishing that the TVM of the subject property was $148,160 for the 2020 tax year. Instead, the evidence persuasively establishes that the subject property sold for $300,000 in May of 2019, (Tr. pt. 1, 3:24-40), and was appraised for $295,000 as of July 25, 2018, (Ex. 3 at 4). The sale price and appraisal opinion of value support the $232,810 BOE value.
To the extent that Mrs. Miller argues that she did not receive notice of the valuation increase from Respondent, the record reflects that Complainants received sufficient notice of the 2020 assessment to appeal such assessment to the BOE. To the extent that Mrs. Miller challenges notification of the increase of the 2019 value, the 2019 assessment is not currently before the STC.
Further, Mrs. Miller’s arguments based on Respondent’s assessment of neighboring properties and her related exhibits are not persuasive evidence of overvaluation of the subject property. While Mrs. Miller mentions that Complainants feel like they were “singled out” and “have no complaints on paying what is the true value” but contend that the fair market value should be applied to all of the properties and “not to just one property because it was purchased,” (Tr. pt 2 31:36-35:09), Complainants’ claim for overvaluation of the subject property is the only issue before the STC in this appeal, and Complainants’ evidence does not persuasively show that the subject property was overvalued.
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2020, was $232,810, with an assessed value of $44,240.
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.
Disputed Taxes
The Collector of Scotland 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.
SO ORDERED October 22, 2021.
Laura A. Storck-Elam
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 22, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Elaina Mejia
Legal Coordinator
[1] Mr. Ward was the Scotland County Assessor at the time of the evidentiary hearing. Michelle VanGorkom is now the Scotland County Assessor.
[2] In the Complaint for Review of Assessment, the proposed assessed value was listed as $28,030. In testimony, Mrs. Miller proposed an appraised value of $148,160
[3] Complainants timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainants’ appeal. Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
[4] Mrs. Miller testified that the home has four bedrooms, but Exhibit 3 indicates that the dwelling has five bedrooms.
[5] The value determined in the odd number years applies in “the following even-numbered year, except for new construction and property improvements.” Section 137.115.1.
[6] For the 2013, 2014, and 2015 tax years, the subject property had a total appraised value of $148,160 and a total assessed value of $28,030, including $27,830 as residential and $200 as agricultural. (Ex. A at 6-8) For the 2016, 2017, and 2018 tax years, the subject property was split into parcel number 2-10-05.0-21-00.0-00-04.001 for the residential and agricultural portion, and parcel number 2-10-05.0-21-00.0-00-04.002 for the commercial and residential portion. For all three years, the subject property had a total appraised value of $125,540 for the residential and agricultural portion and a total appraised value of $31,870 for the commercial and residential portion. (Ex. A at 9-14) The commercial classification was due to the presence of a veterinarian office on the subject property. (Tr. pt. 2 19:10-42)