State Tax Commission of Missouri
RELIANCE BANK, )
v. ) Appeal Nos.09-12642
JAKE ZIMMERMAN,ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization is SET ASIDE.Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in money for the subject property for tax years 2009-2010 is set at $1,200,000, commercial assessed value of $384,000.
Complainant represented by Counsel, Thomas Campbell, St. Louis, Missouri.
Respondent represented by Associate County Counsel, Edward Corrigan.
Case decided by Hearing Officer Maureen Monaghan.
Complainant appeals, on the grounds of overvaluation, the decision of the St. Louis County Board of Equalization.The Commission takes this appeal to determine the market value for the subject property on January 1, 2009.Complainant presented no evidence as to discrimination and therefore that ground for appeal is abandoned.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 St. Louis County Board of Equalization.Complainant appeals on the ground of overvaluation.
2. Schedule and Procedure. On February 27, 2013, the State Tax Commission issued an Order setting forth the schedule and procedures for this appeal.The Schedule and Procedure required that each party file and exchange exhibits and written direct testimony to establish their case in chief on or before July 1, 2013.Complainant filed and exchanged the exhibits set out below under Complainant’s Evidence.Respondent did not file and exchange any exhibits or written direct testimony.Respondent was ordered to designate Assignment of Attorney by July 1, 2013.No entry of appearance was filed with the State Tax Commission.Respondent had until September 20, 2013 to file objections and rebuttal exhibits. Respondent did not submit objections to Complainant’s exhibits or submit rebuttal exhibits.On September 23, 2013, Respondent was ordered to file, on or before October 11, 2013, a Certification of Hearing indicating a good faith intention to require a hearing or allowing the case to be submitted on exhibits.Respondent failed to file with the Commission.
3. Identification of Subject Property. The Complaint for Review of Assessment identifies the subject property as being located at 17263 Horse Creek Rd, St. Louis, Missouri.The locator number is 18U420522.
4. Description of Subject Property. The property is an office/bank on 1.44 acres.The building area is 10,751 square feet.The improvement was constructed in 2004.
5. Assessment. The Assessor appraised the property at $1,990,300, an assessed commercial value of $636,900.The Board of Equalization set a true value of $1,774,000, an assessed value of $567,680.
6. Complainant’s Evidence. Complainant filed with the Commission the following documents:Exhibit A – Appraisal Report; Exhibit B – Written Direct Testimony of State Certified General Appraiser John Hottle.
7. No Evidence of New Construction & Improvement. 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.
8. Presumption of Correct Assessment Rebutted. Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish that the market value of the property on January 1, 2009, was $1,200,000.
CONCLUSIONS OF LAW AND DECISION
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.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.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.
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.True value in money is defined in terms of value in exchange and not value in use.It is the fair market value of the subject property on the valuation date.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.
Mr. Hottle conducted his appraisal of the property under appeal consistent with this standard.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, 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.The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.
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.The Hearing Officer as the trier of fact may consider the testimony of an 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 experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.The Hearing Officer is persuaded that the valuation presented in the appraisal is based upon appropriate and sound appraisal practice and therefore constitutes substantial and persuasive evidence to establish the value concluded of $1,200,000.
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.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.Mr. Hottle appraised the property developing both the sales comparison and income approaches to value.The methodologies utilized were appropriate for the appraisal problem presented in the present appeal.
Complainant Proves 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, 2009.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.”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.
The appraisal reviewed sales of comparable properties using office buildings.Adjustments were made based upon location, time, age, size, design, conditions and quality.The resulting value indication was $1,240,000.
The appraisal developed an income approach to value.The appraiser used market rents and occupancy rates to develop income potential.The appraiser used the market operating expenses and determined a net operating income.A cap rate was derived from the market and applied for a value conclusion of $1,200,000.
The appraiser reconciled an opinion of value of $1,200,000.
The Complainant’s appraisal evidence meets the required evidentiary standard to rebut the presumption of correct assessment by the Board and to establish the true value in money as of January 1, 2009 of the subject property.Therefore, Complainant has establish a fair market value of $1,200,000 for the property under appeal and the assessment of same must be made based on that value.
Issuance of Decision Absent Evidentiary Hearing
The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, correcting any assessment which is unlawful, unfair, improper, arbitrary or capricious.The filing of exhibits and written direct testimony establishes the basis upon which opportunity for an evidentiary hearing can be held.In the present case, only Complainant filed exhibits and written direct testimony.The Complainant has the burden to present substantial and persuasive evidence.The Respondent did not file any rebuttal exhibits. The Respondent may have cross examined the Complainant’s expert and was provided with an opportunity to notify the Hearing Officer that they wished to cross examine the expert witness.The Respondent failed to file a request.
Since Respondent voluntarily waived cross examination and presenting any rebuttal evidence, an evidentiary hearing would serve no purpose.Accordingly, the responsibility of the Hearing Officer, as has been addressed above, was to simply consider the exhibit and testimony filed and then proceed to ascertain if said exhibit met the standard of substantial and persuasive evidence to establish the market value of the property.
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 2009 and 2010 is set at $384,000.
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.
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 November 5, 2013.
STATE TAX COMMISSION OFMISSOURI
 Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
 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)
 See, Cupples-Hesse, supra.
 Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
 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).
 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).
 Hermel, supra.
 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.
 Section 138.430.2, RSMo.
 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).
 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).
 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).
 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).
 Hermel, supra.
 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).
 Section 138.431.5 RSMo; 12 CSR 30-3.080 (2)
 Section 138.432, RSMo.