STATE TAX COMMISSION OF MISSOURI
PATRICK FOX, )
) Appeal No. 19-100001
) Parcel No. 17J530337
JAKE ZIMMERMAN, ASSSESSOR, )
St LOUIS COUNTY, MISSOURI )
DECISION AND ORDER
Patrick Fox (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the fair market value of the subject property on January 1, 2019 was $143,300. Complainant claims the property was overvalued and the assessment was discriminatory.
The hearing officer conducted an evidentiary hearing. Complainant did not present substantial and persuasive evidence establishing overvaluation. Complainant elected not to pursue his discrimination claim. The BOE’s decision is affirmed.
FINDINGS OF FACT
- The Subject Property
- The subject residential property is located at 1309 Purdue Avenue in University City, Missouri. The parcel number is 17J530337.
- The subject property consists of an approximately 7,500 square foot lot, a 1,393 square foot house, and a detached 400 square foot garage.
- The house was constructed in 1929. The external walls are brick. The house has one and one half stories and five rooms. There are two bedrooms and one bathroom. The garage is constructed of brick or stone. The house and garage are in average condition.
- The subject property is located on a street with larger houses and larger lots than adjacent neighborhoods. Adjoining properties have larger lots and larger houses than the subject property.
- Respondent determined the fair market value of the subject property was $148,300. Respondent valued the land at $30,800 and the improvements at $117,500.
- The BOE Decision
- The BOE reduced the value of the improvements from $117,500 to $112,500, and determined the fair market value as of January 1, 2019 was $143,300.
- Complainant’s Appeal
- Complainant timely appealed the BOE decision to the State Tax Commission (Commission).
- Complainant alleged the subject property was overvalued and subjected to a discriminatory assessment.
- Overvaluation Claim
- Complainant testified he purchased the subject property in June 2018 for $149,000, but asserts the fair market value as of January 1, 2019 was $121,700. The purchase price included a washer, dryer, stove, and refrigerator.
- Complainant submitted exhibits A-X. Each exhibit was admitted into evidence. Complainant’s exhibits were as follows:
|Exhibit A||Assessment information for subject property|
|Exhibit B||Respondent’s comparable sales analysis|
|Exhibit C||Assessment information for 1301 Purdue Avenue|
|Exhibit D||Assessment information for 1315 Purdue Avenue|
|Exhibit E||Photograph of subject property|
|Exhibit F||Photograph of 1301 Purdue Avenue|
|Exhibit G||Photograph of 1301 Purdue Avenue|
|Exhibit H||Photograph of 1315 Purdue Avenue|
|Exhibit I||Photograph of 1315 Purdue Avenue|
|Exhibit J||Sales contract for subject property|
|Exhibit K||Inspection report for subject property|
|Exhibit L||Inspection notice for subject property|
|Exhibit M||Continuation of inspection notice|
|Exhibit N||Amendment to sales contract|
|Exhibit O||Fannie Mae interested party contribution limits table|
|Exhibit P||Deed of trust|
|Exhibit Q||Calculation of loan to value ratio and closing credits|
|Exhibit R||Overhead image of subject property and neighboring property|
|Exhibit S||Aerial image|
|Exhibit T||Comparison of subject property and neighboring property value|
|Exhibit U||Reconciliation of sale price and adjusted sale price|
|Exhibit V||Comparable sales|
|Exhibit W||BOE decision|
|Exhibit X||IAAO mass appraisal guidance|
- Complainant’s exhibit A shows, among other things, the sales history for the subject property. Exhibit A shows that prior to Complainant purchasing the subject property for $149,000 in June 2018, the property sold for $158,900 in 2010 and for $145,000 in 2004. Exhibit A shows Respondent classified both sales as valid, and there was no evidence they were not. There was no evidence the subject property or surrounding neighborhood deteriorated during the time period including these three sales.
- Complainant’s proposed value is based on his comparable sales analysis. See Ex. V. Complainant admitted he has no training or experience as an appraiser or in making market based adjustments to comparable sales.
- Complainant testified he selected five sales of similar properties from Respondent’s database. Exhibit V shows Complainant averaged the sale price per square foot of the five sales ($87.33) and multiplied that figure by 1,393 (the square footage of his house) to calculate a proposed value for the subject property of approximately $121,650. Exhibit V shows Complainant’s analysis makes no adjustment accounting differences between his proposed comparable sales and the subject property.
- Respondent’s senior residential appraiser, Sharon Kuelker, credibly testified Complainant’s proposed comparable properties have lower values because they are located on “inferior” streets. Kuelker credibly testified her visual observations confirmed these streets have smaller homes that are not as well maintained as the subject property and its neighboring properties. Kuelker credibly testified these neighborhood characteristics result in lower property values relative to the subject property. Complainant’s comparable sales analysis does not account for these or any other differences between his proposed comparable sales and the subject property.
- Complainant testified he overpaid for the property by $10,000 to $15,000. Complainant acknowledged that if he overpaid by $15,000, the fair market value would be $134,000, not $121,700. Complainant testified that when considered “in conjunction with” his comparable sales analysis, the $134,000 value could be reconciled with his proposed value of $121,700. Neither Complainant’s testimony nor his exhibits provide any evidence supporting such a reconciliation.
- Respondent submitted Exhibits 1-4. Each exhibit was admitted into evidence. Respondent’s exhibits consisted of a certificate of value showing Complainant purchased the subject property for $149,000 (Ex. 1), a deed of trust showing Complainant borrowed $141,550 from a financial institution to purchase the subject property (Ex. 2), a Multiple Listing Service listing sheet (Ex. 3), and Respondent’s comparative market analysis (Ex. 4).
- Respondent’s exhibit 4 listed sales of one and one half and two story homes with 950 to 1550 square feet in the subject property’s subdivision from January 1, 2017 to March 1, 2019. The median sale price was $147,000, and the average sale price was $141,880. The average price per square foot was $106.65. The $106.65 average price per square foot for recent sales of properties in the same subdivision as the subject property supports a finding the subject property is worth approximately $149,000; the exact amount Complainant paid for the subject property in June 2018.
- Discrimination Claim
- Complainant’s discrimination claim was bifurcated and scheduled for a separate evidentiary hearing. At the evidentiary hearing regarding his overvaluation claim, Complainant elected not to proceed with his discrimination claim. Complainant stated he understood the instant decision and order would reflect his decision not to proceed with the discrimination claim.
- The fair market value of the subject property as of January 1, 2019 is $143,300. The assessed value is $27,227.
CONCLUSIONS OF LAW
The Commission has authority, “under such rules as may be prescribed by law, to hear appeals from local boards in individual cases and, upon such appeal, to correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.” Mo. Const. art. X, § 14. Section 138.430.1, RSMo 2000, authorizes the Commission to hear appeals concerning assessment, valuation, the method or formula used in determining valuation, or the assignment of a discriminatory assessment. “The commission shall investigate all such appeals and shall correct any assessment or valuation which is shown to be unlawful, unfair, improper, arbitrary or capricious.” Id. “To hear and decide appeals pursuant to section 138.430, the commission shall appoint one or more hearing officers.” Section 138.431.1. 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.” Section 138.431.5.
- True Value in Money
All real property and tangible personal property must be assessed at its value or a percentage of its value as fixed by law for each class and for each subclass. Mo. Const. art. X, sec. 4(a), 4(b). Section 137.115.5(1)(a) provides residential property is assessed at 19% of its true value in money. The true value in money “is an estimate of the fair market value on the valuation date.” Hermel, Inc. v. State Tax Comm’n, 564 S.W.2d 888, 897 (Mo. banc 1978). 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 true value in money is a factual issue. Parker v. Doe Run Co., 553 S.W.3d 356, 360 (Mo. App. 2018).
- Evidentiary Standards
The hearing officer is the trier of fact and determines the credibility and weight of the evidence. Citizens for Rural Pres., Inc. v. Robinett, 648 S.W.2d 117, 132 (Mo. App. 1982); see also Exch. Bank of Mo. v. Gerlt, 367 S.W.3d 132, 136 (Mo. App. 2012) (the trier of fact determines credibility and is free to disbelieve all or part of a party’s 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 to.” St. Louis Cty. v. State Tax Comm’n, 515 S.W.2d 446, 450 (Mo. 1974); see also Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. 2015) (the relative weight of any relevant factor is for the administrative hearing officer to decide). “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).
- Complainant’s Burden of Proof
A taxpayer challenging the assessment, valuation, the method or formula used in determining valuation, or the assignment of a discriminatory assessment bears the burden of proving the assessment or valuation was “unlawful, unfair, improper, arbitrary or capricious.” Section 138.430.1; Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. 2003).
The BOE’s valuation is presumed correct, but the taxpayer may rebut this presumption with “substantial controverting evidence.” Hermel, Inc. v. State Tax Comm’n, 564 S.W.2d 888, 895 (Mo. banc 1978) (quoting Cupples Hesse Corp. v. State Tax Comm’n, 329 S.W.2d 696, 702 (Mo. 1959)). Substantial evidence is evidence which “has probative force upon the issues . . . and from which the trier of fact can reasonably decide the case on the fact issues.” Cupples Hesse, 329 S.W.2d at 702 (internal quotation omitted).
If the taxpayer produces substantial evidence rebutting the BOE presumption, “the burden of proof on the facts and inferences would still rest on petitioner, for it is the moving party seeking affirmative relief.” Cupples Hesse, 329 S.W.2d at 702. To prevail, the taxpayer must produce “persuasive” evidence sufficient to convince the trier the disputed fact has been established. White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010); see also Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002) (evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact”).
Complainant did not produce substantial evidence rebutting the presumption the BOE decision correctly determined the fair market value of the subject property. First, Complainant’s proposed comparable sales analysis was based on sales of smaller, one story homes in less desirable neighborhoods. Respondent’s appraiser credibly testified Complainant’s proposed comparable sales show lesser values relative to the subject property because they are smaller homes in less desirable neighborhoods. Consistent with Complainant’s admission he is not an appraiser, Complainant’s comparable sales analysis makes no adjustment for differences between these properties and the subject property. Complainant’s comparable sales analysis is not substantial evidence supporting his proposed value of $121,700 or rebutting the presumption the BOE’s determination of fair market value is correct.
Second, Complainant’s exhibit A shows that prior to Complainant purchasing the subject property for $149,000 in June 2018, the property sold for $145,000 in 2004 and $154,900 in 2010. Complainant produced no substantial evidence showing why his proposed value is better evidence of value than the last three valid sales of the subject property over a period of 15 years. The sales history shown by exhibit A does not support Complainant’s proposed value of $121,700, but is consistent with BOE’s determination the fair market value of the subject property is $143,300.
Finally, Complainant purchased the subject property for $149,000 in June 2018, and testified he overpaid for the subject property by up to $15,000. If Complainant overpaid by $15,000, the fair market value would be $134,000, not $121,700. Complainant provided no substantial evidence to reconcile the inconsistency. Complainant’s testimony he overpaid for the subject property by up to $15,000 does not support his proposed value of $121,700.
Complainant did not produce substantial evidence rebutting the presumption the BOE correctly determined the fair market value of the subject property. Complainant’s overvaluation claim is denied.
- Discriminatory Assessment
The United States and Missouri constitutions prohibit discriminatory taxation of similarly situated taxpayers. See U.S. Const. amend. XIV; Mo Const. art. X, § 3. Complainant elected not to proceed with his discrimination claim, and presented no evidence supporting that claim. Complainant’s discrimination claim is denied.
CONCLUSION AND ORDER
The BOE decision is affirmed. The true value in money of the subject property is $143,300. The assessed value is $27,227.
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, or emailed to firstname.lastname@example.org, and a copy of the application must be sent to each person listed below in the certificate of service.
Failure to state the specific facts or law upon which the application for review is based will result in summary denial. Section 138.432.
The Collector of Monroe 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 October 16, 2019.
STATE TAX COMMISSION OF MISSOURI
Eric S. Peterson
Senior Hearing Officer
 Complainant appeared pro se. Respondent appeared through counsel Steven Robson.
 All statutory citations are to RSMo 2000, as amended.
 Section 138.060.1 provides “[t]here shall be no presumption that the assessor’s valuation is correct.” The plain language of the statute negates the former presumption the assessor’s valuation is correct, but leaves intact the longstanding presumption the BOE’s valuation is correct. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 n.2 (Mo. App. 2008); see also Parker, 553 S.W.3d at 360.
 Complainant asserts deducting closing credits and personal property included in the $149,000 sale price yields an “adjusted sales price” of $142,113.21. See Ex. U. Complainant’s “adjusted sales price” calculation does not support his proposed value of $121,700.