State Tax Commission of Missouri
PHILLIP KELLEY,)
)
Complainant,)
)
v.)Appeal No.11-77000
)
CHARLES TRILLER, ASSESSOR,)
PERRY COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On November 1, 2011, Hearing Officer Maureen Monaghan entered her Decision and Order (Decision) affirming the assessment by the Perry County Board of Equalization.
Complainant filed his Application for Review of the Decision.[1]
CONCLUSIONS OF LAW
Standard Upon Review
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but 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.[2]
The Hearing Officer as the trier of fact may consider the testimony of an expert witness or an owner and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts or of owners who testify on the issue of reasonable value, but may believe all or none of the expert’s or owner’s testimony and accept it in part or reject it in part.[3]
The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[4]
DECISION
Complainant’s Application for Review essentially consists of various questions relative to aspects of the evidence which Respondent presented at the hearing in this matter.There is nothing that alleges an error of fact or law made by the Hearing Officer in her Decision.The Hearing Officer properly concluded that Complainant failed to meet the required evidentiary standards to prove either the fair market value of the property under appeal as of January 1, 2011, or to establish a claim of discrimination by the assessing officials in the assessing process on Complainant’s property.The Decision was not based upon Respondent’s evidence, but upon the lack of evidence presented by Complainant.Respondent could have elected to have presented no evidence in the case and simply rested upon the presumption of correct assessment by the Board and the result would have been the same due to Complainant’s failure to make a prima facie case of overvaluation or discrimination.
A review of the record in the present appeal provides support for the determinations made by 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 her discretion as the trier of fact and concluder of law in this appeal.[5]
The Hearing Officer did not err in her determination that Complainant failed to meet his burden of proof and accordingly, the presumption of the Board’s correct assessment was not rebutted.
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
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.
Protested Taxes
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 Perry 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 February 7, 2012.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Randy B. Holman, Commissioner
ORDER CORRECTING DECISION AND ORDER NUNC PRO TUNC
Order Correcting Decision and Order dated November 1, 2011, is corrected nunc pro tunc as follows:
On page 2, paragraph 1, in the Decision, “Franklin County”is stricken and “Perry County” is inserted in lieu thereof, in all other respects the Decision is affirmed as issued.
SO ORDERED November 10, 2011
STATE TAX COMMISSION OF MISSOURI
Maureen Monaghan
Hearing Officer
DECISION AND ORDER
HOLDING
Decision of the Perry County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax year 2011 is set at $80,603, residential assessed value of $15,315.Complainant appeared pro se.Respondent appeared in person and by attorney Thomas Hoeh.
Case heard and decided byHearing Officer Maureen Monaghan.
ISSUE
Complainant appealed, on the grounds of overvaluation and discrimination, the decision of the Perry County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011, and whether there was an intentional plan of assessing officials to assess the property at a value greater than 19% of fair market value or at a greater percentage than the average residential assessment in the county.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.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Franklin County Board of Equalization.A hearing was conducted on October 6, 2011, at the Perry County Courthouse, Perryville, Missouri.
2.Assessment.The Assessor appraised the property at $80,603, a residential assessed value of $15,315.[6]The Board sustained the assessment.
3.Subject Property.The subject property is located at 248 W North Street, Perryville, Missouri.The property is identified by map parcel number 76-10-4-19-2-3-42.The property consists of 8,106 square foot lot improved with a one and one half story, three bedroom, 1 bath house with 3 car garage.A 16’ x 20’ deck was added in 2010.The property is approximately 79 years old and is in good condition.
4.Complainant’s Evidence.Complainant submitted Exhibits 1 – 14 which were received into the record.Mr. Kelley testified at hearing.
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EXHIBIT |
DESCRIPTION |
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1 |
Notice of Change in Assessed Value |
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2 |
Year to Year Comparison Report |
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3 |
Listing of Property near Subject |
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4 |
Listing of Property near Subject |
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5 |
Listing of Property near Subject |
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6 |
BOE Documents of Subject |
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7 |
Assessor’s Records on Subject |
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8 |
Assessor’s Record on Comparable |
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9 |
Photographs of Subject |
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10 |
Assessor’s Record & MLS record for sale on 7/27/11 |
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11 |
Assessor’s Record and MLS record for sale on 12/30/2010 |
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12 |
Sale 3/9/11 |
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13 |
Assessor’s Record & MLS record for sale on 5/11 |
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14 |
Assessor’s Website |
5.Respondent’s Evidence.Respondent submitted Exhibits A, B, and C, which were received into evidence.Mr. Triller testified at hearing.Mr. Triller presented his appraisal of the property.He developed the sales comparison and the cost approach for the properties.The comparable properties were within .58 miles of the subject.They sold between June and August 2010, six months prior to the valuation date.The subject property is superior to the comparable properties in that it has a larger garage and a deck.The subject property is inferior to the comparables in that it is on a smaller lot.The Assessor made appropriate adjustments for differences in size, bed and bath count, garage space and porches.
The Assessor also testified that the value proposed by the Complainant, $71,642, was the value determined by the Assessor’s Office in 2007.The valuation was not changed by the Assessor’s Office in 2009.
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EXHIBIT |
DESCRIPTION |
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A |
Appraisal Report of Subject Property |
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B |
Report of 2010 Sales ranging in selling price of $65,000 to $105,000 within Perryville |
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C |
Cost Approach |
6.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2011, to be $71,642, as proposed.
7.The true value for the subject property for tax year 2011 of $80,603 is affirmed.
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.[7]
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.[8]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[9]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[10]It places the burden of going forward with substantial evidence on the taxpayer – Complainant.As will be addressed below, Complainant failed to present substantial and persuasive evidence that rebutted the presumption of correct assessment by the Board.
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.[11]True value in money is defined in terms of value in exchange and not value in use.[12]It is the fair market value of the subject property on the valuation date.[13]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.[14]
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but 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.[15]
The Hearing Officer as the trier of fact may consider the testimony of an owner or expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of the
owner or of an expert who testify on the issue of reasonable value, but may believe all or none of the owner’s or expert’s testimony and accept it in part or reject it in part.[16]
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.[17]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.[18]
Mr. Kelley did not develop any of the recognized approaches to value.Mr. Triller developed the sales comparison and the cost approaches.
Complainant Fail to Prove Value
In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2011.[19]There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still 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.”[20]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[21]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.[22]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.
Mr. Kelley failed to develop any of recognized approaches to value.Mr. Kelley’s argument primarily focused on the change of the true value as determined by the Assessor’s Office in 2009 ($71,642) to 2011 ($80,603).Exhibits 1-6 were presented by Mr. Kelley to dispute the valuation as determined in 2011 as compared to the valuation determined in 2009.The Exhibits consisted of a realtor’s report of comparison of sale prices from 2009 to 2011.The Exhibits fail to present any evidence to establish the fair market value of the property in 2011.The Complainant failed to establish the market value of the property on January 1, 2009, and January 1, 2011.Without establishing the market value of the subject property, arguing any change of value establishes nothing.
The Exhibits also consisted of listings near the subject property.Listings do not establish sale prices.Sale prices without sufficient information to establish that the sale was a usable market sale, without comparable information, and without market data to make adjustments, provide no evidence as to market value of the subject property.
Exhibits 6, 7, and 8 are records of the County.The records provide no basis for a determination of value of the subject property.Exhibit 9 is photographs of the subject property.A picture may be worth a thousand words, however, when it comes to finding value of a given piece of real property, a picture never finds or sets a value. The photographic exhibits received into evidence provide no evidence from which the Hearing Officer can conclude that the most
probably fair market value of the Complainant’s property on January 1, 2011 was only $71,641.
Value must be derived from market data applicable to the property being appraised.
Exhibits 10, 11, 12, and 13 consists of the Assessor’s records on a particular property and the MLS record of a sale of the property.The sales occurred from December 2010 to July 2011.The properties may be comparables to the subject property.The sales may have occurred during a relevant time period.However, the evidence, without market data for adjustments for any differences in the property and without an investigation of the sale, lacks sufficient reliability and usefulness for determining the market value of the subject property as of January 1, 2011.
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.”[24]
Respondent’s Evidence
The Assessor did not advocate for a different value than the value as set by the Board of Equalization but presented evidence to support their value.The Assessor developed a sales comparison approach and a cost approach.Under the sales comparison approach, the Assessor determined the value of the property to be $90,000.The Assessor also used Marshall and Swift, a recognized cost and valuation source, and determined a valuation of $98,188.
Complainant Failed To Prove Discrimination
In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of their property on January 1, 2011; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction.[25]Evidence of value and assessments of a few properties does not prove discrimination.Substantial evidence must show that all other property in the same class, generally, is actually undervalued.[26]The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive.[27]No other methodology is sufficient to establish discrimination.[28]
Complainant’s first burden was to prove the level of assessment for the subject property in 2011. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.As addressed above, the taxpayer failed to prove the market value of the property under appeal.
Complainant then was required to prove the average level of assessment for residential property in Perry County for 2011.This is done by (a) independently determining the market value of a representative sample of residential properties in Perry County; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.
The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in Perry County must demonstrate a disparity that is grossly excessive.[29]
Complainant’s discrimination claim fails because he failed to establish the market value of his property.Without establishing the market value, the assessment ratio for the subject property cannot be calculated.Without establishing the ratio, it cannot be established that the property under appeal was being assessed at a higher percentage of market value that any other property.
However, even if Complainant had established the market value, the discrimination claim would still fail because he failed to demonstrate that a statistically significant number of other residential properties within Perry County are being assessed at a lower ratio of market value than the subject property
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Perry County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year 2011 is set at $15,315.
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, MO65102-0146, 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. [30]
Disputed Taxes
The Collector of Perry 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 1, 2011.
STATE TAX COMMISSION OFMISSOURI
Maureen Monaghan
Hearing Officer
[1] Application for Review was received by the Commission on November 17, 2011.Order Upon Filing of Application for Review was issued on November 23, 2011.Respondent was given until and including December 22, 2011 to file a Response.Respondent elected to not file a Response.
[2] 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).
[3] St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
[4] Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).
[5] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
[6] Residential property is assessed at 19% of its appraised or true value in money, i.e fair market value.Section 137.115 RSMo.
[10] Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958)
[11] St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).
[12] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
[14] 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.
[15] 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).
[16] St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
[17] See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).
[18] 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. Div. 2 1974).
[20] See, 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).Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).