State Tax Commission of Missouri
| QUALITY EQUIPMENT LEASING SOLUTIONS | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | ) | Appeal Number 14-10899 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
True value in money of subject property is sustained ($5,484,320). Assessment is SET ASIDE. Complainant presented substantial and persuasive evidence to establish the assessed value of subject personal property for 2014 is $162,960.
Complainant appeared by counsel Patrick Keefe.
Respondent appeared by counsel Ed Corrigan
Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
Complainant appeals, on the grounds of misapplication of Section 137.095 RSMo. The Commission takes this appeal to determine the appropriate assessed value for the subject property on January 1, 2014.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. The Complainant first learned of the assessed value of the personal property upon receipt of the property tax bill and timely appealed to the State Tax Commission.
- Evidentiary Hearing. Evidentiary Hearing in this appeal took place on December 16, 2015, in St. Louis County, Missouri.
- Identification of Subject Property. The subject property is identified by account number L00464490. It is further identified as the tractors and trailers owned by Quality Equipment Leasing Solutions, LLC, 400 Lemay Ferry Road, St. Louis County, Missouri.
- Description of Subject Property. The subject property consists of tractors and trailers owned by the Complainant as of January 1, 2014. Complainant states that the market value of the property is not in dispute and sets forth a market value as of January 1, 2014, of $5,484,320[1]. The vehicles are used in interstate commerce. The property is plated with apportioned or license plates indicating participation and compliance with International Fuel Tax Agreement (IFTA) and the International Registration Plan (IRP).
- Involvement in Interstate Commerce The Complainant is subject to the International Fuel Tax Agreement (IFTA) and the International Registration Plan (IRP). The Complainant is required to file with Missouri Motor Carrier the mileage on each power unit by state and fuel purchases in each state on a quarterly basis for IFTA compliance. The figures reported are as a fleet. Complainant also reports to Missouri Motor Carriers mileage on the vehicles individually on an annual basis for IRP compliance – Complainant’s assigned reporting period is July 1 to June 30. The Complainant receives IRP plates for his vehicles. Vehicle mileage reports of companies with IRP plates are reported to the assessor in the county in which a company is located. The reports are issued on June 30 although assessors have access to the Motor Carriers’ information.
For 2012, Missouri’s apportioned miles by quarter for the Complainant as reported by Missouri Motor Carriers were:
| Quarter | % MO miles |
| 1 | 10.56 |
| 2 | 9.741 |
| 3 | 9.704 |
| 4 | 8.101 |
| Annual | 9.483 |
For 2013, Missouri’s apportioned miles by quarter for the Complainant as reported by Missouri Motor Carriers were:
| Quarter | % MO miles |
| 1 | 9.902 |
| 2 | 7.747 |
| 3 | 8.119 |
| 4 | 8.950 |
| Annual | 8.688 |
- Assessment. The Assessor set an assessed value of $673,260 (2014 Personal Property Tax Bill). The Assessor apportioned vehicles purchased prior to June 30, 2013. It did not apportion trucks and trailers purchased after June 30, 2013 – except for two vehicles, one purchased 7/5/13 and another purchased 12/21/13. The County used the apportionment figure (8.91%) as reported by the Missouri Motor Carrier Services dated October 29, 2013.
- Complainant’s Evidence.
| Exhibit | Description |
| A | Calculation of Proper Assessed Value |
| B | Complainant’s International Fuel Tax Association Reports |
| C | Complainant’s 2014 Personal Property Tax Bill |
| D | Section 137.095 RSMo. |
| E | State Tax Commission Manual for Trucks in Interstate Commerce |
| H | Email Correspondence |
| I | Written Direct Testimony of Irfan Sinanovic |
| J | Written Direct Testimony of Nancy Hopkins |
- Respondent’s Evidence.
| Exhibit | Description |
| 1 | Written Direct Testimony of Suzanne Strain |
| 2A | Personal Property Declaration 2014 |
| 2B | Person Property Declaration |
| 2C | Letter dated February 28, 2014 |
| 2D | Property List |
| 2E | Property List |
| 2F | Property List |
| 2G | Missouri Department of Transportation Foreign Jurisdiction Tax Bill |
| 2H | Missouri Department of Transportation IRP Jurisdictional Fees Due – Apportionment by State Dated 10/29/13 – 8.91482% |
| 3 | Section 137.095 RSMo |
| 4A | Chapter 2 of the Missouri State Tax Commission Manual – Taxation of Trucks involved in Interstate Commerce. |
| 5 | Mileage Inquiry |
| 6 | Vehicle Select List |
| 7A | Missouri Motor Vehicles Spreadsheet |
| 7B | Missouri Motor Vehicles Spreadsheet |
| 7C | Missouri Motor Vehicles Spreadsheet |
| 7D | Missouri Motor Vehicles Spreadsheet |
| 7E | Missouri Motor Vehicles Spreadsheet |
| 7F | Missouri Motor Vehicles Spreadsheet |
| 8 | Recalculation of Assessed Value |
| 9 | Written Rebuttal Testimony of Suzanne Strain |
- Presumption of Correct Assessment Rebutted. Complainant’s evidence was substantial and persuasive to establish the assessed value for the subject property as of January 1, 2014, to be $162,960. All vehicles owned by the Complainant as of January 1, 2014 are subject to Section 137.095 RSMo and therefore “must be apportioned to Missouri based upon the ratio of miles traveled in this state to miles traveled in the United States in interstate commerce during the preceding tax year or on the basis of the most recent annual mileage figures available.”
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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.
Complainants’ Burden of Proof
In order to prevail, Complainants 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, 2013. Hermel, supra. 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.” 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). A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.
Taxation of Trucks and Trailers Involved in Interstate Commerce
Article I, Section 8 of the United States Constitution gives the power to regulate commerce among the various states to the United States Congress. The federal courts, after much litigation, have held that states may tax instrumentalities of interstate commerce if the tax does not violate the commerce, equal protection or due process clauses. The test developed is that (1) the property must have a substantial nexus (contact or relationship) with the taxing jurisdiction, (2) the tax must be fairly apportioned, (3) it must not discriminate against interstate commerce, and (4) it must be fairly related to the services rendered by the state. BiGo Markets, Inc, v. Morton, 843 S.W.2d 916 (1992). Due process is satisfied when tangible personal property is taxed according to its tax situs and commerce clause is satisfied if the property tax is apportioned when multiple states have a tax situs.
Trucks owned by an individual are to be taxed in the county where the owner resides. Section 137.090 RSMo. Trucks owned by a corporation and subject to the Missouri Motor Carrier Act (Chapter 390) are to be taxed where they are based. Section 137.095. RSMo. “Based” means the place where the vehicle is most frequently dispatched, garaged, serviced, maintained, operated or otherwise controlled. There is no dispute that the Complainant is located in St. Louis County. Such trucks are included in the mileage figures provided to the Missouri Motor Carrier Services. The Assessor reviews the Missouri Motor Carriers reports of June 30 each year regardless of when the company reports to Missouri Motor Carriers.
Assessors are provided with mileage figures by Missouri Motor Carrier Services for tractors and trailers of owners within the county, but not with mileage for tractors and trailers only “based” in the county. For tractors and trailers based in the county, the county relies on information other than the Missouri Motor Carrier Services report to determine the apportionment percentage.
In 1983, the Commission issued an order to all assessors to apportion interstate truck assessments. The order remains in effect and was upheld by the Missouri Supreme Court in Beelman Truck Company v. Ste. Genevieve County Board of Equalization, 861 S.W.2d 557, 560 (Mo banc 1993). The formula for truck fleets is:
True value of all trucks x percent of Missouri miles of all trucks x 33 1/3 %.
This formula has been incorporated into Section 137.095 RSMo:
- The assessed valuation of any tractor or trailer as defined in section 301.010 owned by a corporation and used in interstate commerce must be apportioned to Missouri based on the ratio of miles traveled in this state to miles traveled in the United State in interstate commerce during the preceding tax year or on the basis of the most recent annual mileage figures available.
Subject Property
The market value of the subject property is $5,484,320. The county’s standardized procedure provides for the use a Missouri Motor Carrier Services report on June 30 for vehicles of companies located in St. Louis County. The June 30 report is used regardless of which quarter the company is required to file their annual report with Motor Carriers Services. If the company is not located in St. Louis County, St. Louis County will use a report other than the Missouri Motor Carrier Services report. There is no required source information for apportionment under Section 137.095 RSMo. The County could base their apportionment either on the fleet miles (ratio of miles traveled in this state to miles traveled in the United State in interstate commerce during the preceding tax year using the report received on June 30 or any report of Missouri Motor Carriers) or on an individual truck or trailer basing the apportionment figure on the most recent annual mileage figure available. For the subject property the county used the Motor Carriers Services apportionment figure of 8.914%. (Exhibit 2H Missouri Department of Transportation IRP Jurisdictional Fees Due – Apportionment by State Dated 10/29/13 – 8.91482%)
Ad valorem tax on the subject property which is engaged in interstate commerce is appropriate since subject property has substantial nexus with St. Louis as the company is located there and the vehicles are based in St. Louis County and the tax is appropriate if apportioned fairly – according to miles driven in Missouri.
| True Value x | Apportionment X | Assessment Ratio | = Assessed value |
| $5,484,320 | 8.914% | 33 1/3% | $162,960 |
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2013 and 2014 is set at $162,960.
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. Section 138.432, RSMo
Disputed Taxes
The Collector of St. Louis 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 this 17th day of March, 2016.
STATE TAX COMMISSION OF MISSOURI
Maureen Monaghan
Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 17th day of March, 2016, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.
Jacklyn Wood
Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
573-751-2414
573-751-1341 Fax
[1] Respondent’s brief claims a market value of $3,732,791. Respondent’s exhibits set forth market values of $5,157,390-$5,381,250.