State Tax Commission of Missouri
RICHARD SCHMIDT,)
)
Complainant,)
)
v.) Appeal Number 09-57018
)
TOM COPELAND, ASSESSOR,)
FRANKLIN COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Franklin County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $43,350, residential assessed value of $8,237; and $1,500, agricultural assessed value$180.Complainant appeared pro se.Respondent appeared in person and by County Counselor, Mark Vincent.Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
The Commission takes this appeal to determine whether ten acres of the property under appeal should be classified as agricultural/horticultural under Section 137.016 (1) and assessed under its agricultural land productivity grade.
SUMMARY
Complainant appeals, on the ground of misclassification, the decision of the Franklin County Board of Equalization, which sustained the valuation and classification of the subject property.A hearing was conducted on December 3, 2009, at the Franklin County Government Building, Union, Missouri.
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.The Assessor appraised the property as residential property at a value of $70,700, assessed value of $13,343.The Board of Equalization sustained the valuation and classification.
2.Complainant’s Evidence.Exhibit A tendered by Complainant was received into evidence.Exhibit A consisted of the following documents; copy of BOE Decision Letter; Copy of 2006 and 2007 Federal Schedule F (Form 1040) – Profit and Loss from Farming;[1] copies of checks for purchase of ginseng seeds in 2004, 2005 and 2006; copies of receipts for sales of ginseng roots in 2003, 2004 and 2006; copy of orders for sales of ginseng seeds in 2008; copy of receipt for St. Clair Farmers Market fee 2009; copy of receipt for purchase of ginseng seeds in 2008; copy of receipt for purchase of shitake and other mushroom spores in 2009;[2] copies of receipts for sale of ginseng seeds and roots in 2009; copy for receipt of purchase of ginseng seed in 2009.
Mr. Schmidt testified in his own behalf relative to his cultivation of ginseng and mushrooms.
3.Respondent’s Evidence.Exhibit 1 – an aerial map of the subject tract was received into evidence on behalf of Respondent.Lori Ruby testified on behalf of Respondent as to the appropriate agricultural grade for the subject property.
4.Commission Exhibit:On December 15, 2009, the Hearing Officer issued his Order Upon Taking Official Notice.Said Order incorporated as Commission Exhibit 1 three Internet Articles on Ginseng.[3]The Hearing Officer advised the parties that objections to taking notice of the articles could be filed on or before December 31, 2009.No objections were filed by either party.
5.Subject Property.The subject property is located at 4219 Project Road, Luebbering, Missouri.The property is identified by map parcel number 57-31-5-22-12.The property consists of 11.9 acres, 1.9 acres of which consists of the Homesite, improved by a residence.[4]The remaining 10 acres are predominately woodlands covered by a combination of native hardwood and cedar trees.[5]The Homesite was valued by the Assessor at a true value in money of $43,350, assessed residential value of $8,237.[6]Complainant did not challenge this valuation or classification.[7]
6.Woodlands.Complainant challenged only the classification and therefore the value of the Woodlands.The Assessor valued the 10 acres at $27,350 as residential land, which resulted in a residential assessment of $5,197.[8]
7.Agricultural Land Productivity Grade.The agricultural land productivity grade applicable to the Woodlands is grade 6.[9]The per acre value for grade 6 land is $150.[10]
8.Woodlands Agricultural/Horticultural Use.The use by Complainant of the Woodlands for cultivation and production of ginseng constitutes an agricultural/horticultural use of the land which requires it be given an agricultural classification and valued under the appropriate agricultural land productivity grade.
9.True Value in Money.The true value in money for Complainant’s residential property is $43,350, assessed residential value of $8,237.The true value in money for Complainant’s agricultural/horticultural land is $1,500, assessed agricultural value of $180.[11]The total assessed value of the subject property is $8,417.
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.[12]
Official and Judicial Notice
Agencies shall take official notice of all matters of which the courts take judicial notice.[13]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[14]The evidence presented in this instance rebuts the presumption that the Board correctly assessed the ten acres of woodland on the property under appeal.
Agricultural/Horticultural Use
Each appeal presented to the State Tax Commission is fact specific.This is especially the case in the present appeal.The controlling fact is that Complainant has worked over recent years to cultivate and produce ginseng for the sale of roots and seeds on the Woodlands portion of his property.[15] For purposes of this Decision the statutory definition of agricultural and horticultural property is controlling.Specifically for purposes of this appeal, such property is defined as “all real property used for agricultural purposes and devoted primarily to the raising and harvesting of crops; …”[16]The word agriculture, as applicable to the present case, is defined as “the science and art of farming, work of cultivating the soil, producing crops.”[17]
Background on Cultivation of Ginseng[18]
American ginseng is a slow growing native perennial plant indigenous to the Eastern United States.It has been exported from American since the Colonial Period.Ginseng grows wild and was not cultivated until the late 1800’s.The method of cultivation employed for the raising of ginseng is the “wild simulated” method.This method replicates the natural environment in which ginseng thrives, specifically, forest or woodland habitat.Each plant takes 8 – 10 years to reach its full potential, as once planted plants are left to grow naturally.Ginseng cultivated in this manner is generally indistinguishable from true wild ginseng.The longer producers allow the plant to grow the more valuable it becomes.The earliest that ginseng should be harvested for sale, other than as seedling roots, is 5 to 6 years.While the plant is growing, seeds can be sold or replanted and leaves can be sold for tea.Younger roots can also be sold to growers starting their own ginseng operation.It has been observed that during its growing cycle, ginseng may remain dormant for a year or two before reemerging and continuing its growth.
Complainant’s Ginseng Cultivation
Mr. Schmidt has been utilizing the wild simulated method for growing of ginseng.The University of Missouri Center for Agroforestry has conducted studies and research to produce a grower’s guide to assist landowners in choosing appropriate locations for sowing and cultivating ginseng.[19]The cultivation of ginseng is not like cultivation of row crops, hay or truck garden fruits and vegetables.It is a different type of agriculture.It is however the growing of a crop.The crop has a high potential to turn generally unproductive forest land into productive land over a long and sustained period of time.
Complainant presented substantial and persuasive evidence to establish his use of the Woodlands for the cultivation of ginseng.This is an agricultural/horticultural use of the property.The 10 acres must be placed in agricultural productivity land grade six and assessed at 12 percent to arrive at the proper assessment of this portion of Complainant’s property.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Franklin 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 $8,417.[20]
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 appeal is based will result in summary denial. [21]
The Collector of Franklin 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 January 29, 2010.
STATE TAX COMMISSION OFMISSOURI
_____________________________________
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 29thday of January, 2010, to:Richard Schmidt, 4219 Project Road, Luebbering, MO 63061, Complainant; Mark Vincent, Franklin County Counselor, P.O. Box 439, Union, MO 63084, Attorney for Respondent; Tom Copeland, Assessor, 400 E. Locust, Suite 105A, Union, MO 63084; Debbie Door, Clerk, Franklin County Courthouse, 400 E. Locust, Suite 201, Union, MO 63084; Linda Emmons, Collector; Franklin County Courthouse, 400 E. Locust, Suite 103, Union, MO 63084.
___________________________
Barbara Heller
Legal Coordinator
Contact Information for State Tax Commission:
Missouri – State Tax Commission
P.O. Box 146
301 W. High Street, Room 840
Jefferson City, MO 65102
573-751-2414
573-751-1341 FAX
[1] No Form F for 2008 was submitted, as Complainant was not required to file an income tax return in 2008 – Letter from Mr. Schmidt, 12/12/09.
[2] Additional mushroom spore varieties purchased were Maitake, Lion’s Mane, Pearl Oyster and Reishi.
[3] Article 1: http://bearsystems.com/ginseng/ginseng.html – Scott Harris
Article 2: http://www.centerforagroforestry.org/profit/ginseng/index.asp
Article 3: http://www.ehow.com/how 4873354 grow-cultivate-ginseng.html
[10] 12 CSR 30-4.010 (1) (F);Forest land, whose cover is predominantly trees and other woody vegetation, of two acres or more in acre, if cleared and used for agricultural crops, would fall into land grades #1 – # 5 should be placed in land grade #6.12 CSR 30-4.010 (2) (A)
[14] 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).
[15] Evidence that in 2009 Complainant had begun the cultivation of shitake and other mushrooms, by cutting and preparing 40 logs for mushroom spores on a portion of the 10 acres of Woodlandsis not considered in this Decision, since that horticultural activity was not occurring on 1/1/09.The cultivation of mushrooms within the Woodlands as established constitutes under these facts an additional horticultural use.