STATE TAX COMMISSION OF MISSOURI
| RICKY DEAN JACKSON, | ) | Appeal No. 21-440081 |
| ) | Parcel No. 03-09.0-30-00.0-00-08.00000 | |
| Complainant, | ) | |
| ) | ||
| v. | ) | |
| ) | ||
| RONDA ELFRINK, ASSESSOR, | ) | |
| BOLLINGER COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
Ricky Dean Jackson (Complainant) appeals the Bollinger County Assessor’s (Respondent) assessment classifying the subject property as residential, commercial, and agricultural with an aggregate value of $167,450 as of January 1, 2021. Complainant alleges Respondent misclassified a portion of the property as commercial rather than residential. Complainant produced substantial and persuasive evidence of misclassification. The assessment is set aside to the extent it misclassifies a portion of the subject property as commercial instead of residential. The portion assessed as commercial is re-classified as residential as of January 1, 2021.
FINDINGS OF FACT
- The Subject Property. The subject property is a 17.71-acre parcel improved with a 100 foot by 50 foot steel building. The building is 16 feet tall. The building includes a residence occupying approximately 30 feet by 47 feet within the steel building. The remainder of the building is used as a garage and storage area.
- Assessment and Valuation. As of January 1, 2021, Respondent classified the subject property as agricultural, residential, and commercial with an aggregate TVM of $167,450.
- Complainant’s Evidence. Complainant did not introduce exhibits.[2] Complainant testified the subject’s address changed from the former rural route and post office box designation to 33274 Birch Drive, Patton, Missouri. Complainant testified the address change caused some mail delivery problems. Complainant repeatedly testified he never received a mailed notice from Respondent informing him of the commercial classification.
Complainant testified he began construction on the building in 2018. Complainant testified he uses part of the building as a residence and other part as a garage and storage area. Complainant, referring to the subject property, testified there “has never been anything done in here” of a commercial nature. Complainant testified he has never used the steel building to perform paid work for anyone. Complainant testified the garage and storage areas are a “hobby shop for me.”
Complainant testified he plans to use the subject property commercially in the future. Complainant applied for a federal Small Business Administration (SBA) loan to fund construction of additional space for potential future commercial use. The SBA required Complainant to obtain a business license, which he did. Complainant also registered with the Missouri Secretary of State an LLC named “72 Auto LLC.” Complainant testified that while he obtained a Bollinger County business license and registered an LLC, he never actually used the subject property for any commercial purpose.
- Respondent’s Evidence. Respondent filed a motion to dismiss asserting Complainant failed to exhaust administrative remedies by not filing a BOE appeal. Respondent also asserted Complainant failed to pay under protest pursuant to Section 139.031, RSMo 2000. Respondent attached Exhibits 1 through 3 to the motion to dismiss:
| Exhibit 1 | 2021 Real Estate Change of Value Notice addressed to Complainant a RR 5 Box 1920, Patton, MO 63662-9721. The Notice allocates the $167,450 appraised value to residential, agricultural, and commercial portions of the subject property. |
| Exhibit 2 | Letter to Respondent from EJ Rice Company stating the company is “confident” the Real Estate Change of Value Notice was presented to the United States Postal Service on June 1, 2021, and that it is “highly likely” the postal carrier “attempted delivery.” The letter notes the mailing cannot be traced “beyond the Business Mail Entry point.” |
| Exhibit 3 | Bollinger County tax receipt showing Complainant paid the taxes due on the subject property in full on December 8, 2021. |
Respondent testified the exhibits show her office mailed the Notice to Complainant. Respondent further testified her office sent approximately 2,600 notices to Bollinger County taxpayers and Complainant is the only taxpayer claiming lack of notice.
Respondent testified the commercial classification was based on Complainant’s acquisition of a business license and the LLC registration. Respondent testified she was not aware of any “ongoing” commercial use of the subject property as of January 1, 2021.
- Classification and Value. The portion of the subject property classified by Respondent as commercial was not used directly or indirectly for commercial purposes and, instead, consists of a structure for use residentially. As of January 1, 2021, the subject was agricultural and residential, with a TVM of $167,450. The TVM of the agricultural portion was $5,650. The TVM of the residential portion was $161,800.
CONCLUSIONS OF LAW
- Motion to Dismiss. Respondent’s motion to dismiss is denied. Complainant credibly testified he did not receive the 2021 Real Estate Change of Value Notice. Complainant testified the subject property’s address changed from the address utilized by Respondent – RR 5 Box 1920, Patton, MO 63662-9721 – to 33274 Birch Drive, Patton, Missouri. Complainant further testified the address change resulted in some mail delivery failures. Under these specific circumstances, Complainant persuasively established he did not receive notice of the change of assessment.
Respondent’s Exhibit 2 does not change the analysis. Exhibit 2 shows only that the company contracted to perform the mailing is “confident” the notice was mailed and that it is “highly likely” the postal carrier “attempted delivery.” Exhibit 2 states the mailing cannot be traced “beyond the Business Mail Entry point.” Respondent’s exhibits do not persuasively rebut Complainant’s testimony.
When, as in this case, the taxpayer is not notified of the assessment, 12 CSR 30-3.010(1)(B)1 authorizes the taxpayer to file an appeal when the assessment is “first communicated … to the owner or on or before December 31 of the tax year in question, whichever is later.” (Emphasis added). Complainant filed his STC appeal prior to December 31, 2021, as authorized by 12 CSR 30-3.010(1)(B)1. Complainant’s timely appeal vests the STC with authority to hear and decide this appeal.
Respondent’s reliance on Section 139.031 and 12 CSR 30-3.010(1)(B)2 does not change the result. Neither the statute nor the regulation require dismissal of Complainant’s appeal.
Section 139.031.1 provides:
Any taxpayer may protest all or any part of any current taxes assessed against the taxpayer, except taxes collected by the director of revenue of Missouri. Any such taxpayer desiring to pay any current taxes under protest or while paying taxes based upon a disputed assessment shall, at the time of paying such taxes, make full payment of the current tax bill before the delinquency date and file with the collector a written statement setting forth the grounds on which the protest is based. The statement shall include the true value in money claimed by the taxpayer if disputed. An appeal before the state tax commission shall not be dismissed on the grounds that a taxpayer failed to file a written statement when paying taxes based upon a disputed assessment.
(Emphasis added).
The plain language of Section 139.031 provides a taxpayer “may protest” by making a timely, full payment of the current tax bill and filing a written statement setting forth the grounds of the protest. A taxpayer “desiring” to lodge a Section 139.031 protest must timely pay the disputed taxes and file a written statement of the protest grounds. Complainant timely paid the disputed taxes prior to the delinquency date. The remaining requirement for Section 139.031 protest is a written statement of the grounds of the protest. The statute expressly provides an STC appeal shall not be dismissed on grounds the taxpayer did not file a written statement. Section 139.031.1 does not require dismissal of Complainant’s appeal.
12 CSR 30-3.010(1)(B)2 likewise does not require dismissal. The regulation provides:
A property owner who, due to lack of notice, files an appeal directly with the State Tax Commission after tax statements are mailed should pay his or her taxes under protest pursuant to the requirements of section 139.031, RSMo, and the county collector shall upon receiving either the payment under protest or the notice specified in section 138.430, RSMo, impound all portions of taxes which are in dispute[.]
(Emphasis added).
The regulation provides only that a taxpayer first filing an appeal with the STC due to lack of notice “should” pay under protest. The regulation does not condition an STC appeal on a Section 139.031.1 protest. When, as in this case, the taxpayer does not receive notice of the change in assessment and files an appeal directly with the STC, the statutory protest procedure is unnecessary because, as the regulation provides, once the county collector receives notice of an STC appeal pursuant to Section 138.440, the disputed taxes are impounded pending final disposition of the STC appeal.
Complainant’s timely appeal vests the STC with authority to hear and decide this appeal. Respondent’s motion to dismiss is denied.
- Assessment and Valuation. Residential real property is assessed at 19% of its TVM. Section 137.115.5(1)(a). Commercial real property is assessed at 32% of its TVM. Section 137.115.5(1)(c). In this case, relevant date for determining classification is January 1, 2021. Section 137.115.1.
- Evidence. The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). “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. The taxpayer bears the burden of proof and must show by a preponderance of the evidence the property is misclassified. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s classification of the subject property is presumptively correct. Rinehart v. Bateman, 363 S.W.3d 357, 367 (Mo. App. W.D. 2012). “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Id. (internal quotation omitted). “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is a “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).
- Classification. In pertinent part, Section 137.016.1(1) defines “residential property” as “all real property improved by a structure which is used or intended to be used for residential living by human occupants[.]” Section 137.016.1(3) defines “Utility, industrial, commercial, railroad and other real property” as “all real property used directly or indirectly for any commercial, mining, industrial, manufacturing, trade, professional, business, or similar purpose[.]” “Determining whether a property’s use falls within one of the subclassification definitions set forth in section 137.016.1 is an issue of fact for the STC.” Rinehart, 363 S.W.3d at 366.
- Complainant Produced Substantial and Persuasive Evidence of Misclassification.
The substantial and persuasive evidence shows Complainant uses the steel building on the subject property as a residence and garage. Complainant testified the steel building includes his residence and that the remainder of the building is used as a garage and storage area. The garage and storage area are within the same structure as the residence and facilitate Complainant’s residential use. Complainant consistently and credibly testified he has never used any portion of the subject property for a commercial purpose. The substantial and persuasive evidence shows that as of January 1, 2021, the steel building was “a structure … used or intended to be used for residential living by human occupants.” Section 137.016.1(1).
The fact Respondent obtained a business license and registered an LLC in an effort to obtain an SBA loan to enable future commercial use does not support commercial classification as of January 1, 2021. Complainant’s aspirations for future commercial use do not alter the fact that as of the valuation date, Complainant was using the steel building as a residence.
CONCLUSION AND ORDER
Complainant produced substantial and persuasive evidence of misclassification. The assessment is set aside to the extent it misclassifies a portion of the subject property as commercial instead of residential. The portion assessed as commercial is re-classified as residential as of January 1, 2021.
Application for Review
A party may file an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person 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.
Disputed Taxes
The Collector of Bollinger County, and 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 the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.
SO ORDERED November 4, 2022.
Eric S. Peterson
Senior Hearing Officer
State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on November 4, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Noah Shepard
Legal Coordinator