ROGER HEATH, )
v. ) Appeal Number 01-41500
MARSHA PEERY, ASSESSOR, )
AUDRAIN COUNTY, MISSOURI, )
DECISION AND ORDER
The decision of the Audrain County Board of Equalization classifying the subject property as residential and setting value at $24,000 (assessed value $4,560) is hereby AFFIRMED.
The only issue in this case is the correct classification of the subject property.
A hearing was conducted on November 8, 2001, before Hearing Officer Luann Johnson, at the Audrain County Courthouse, Mexico, Missouri. Complainant and Respondent appeared pro se.
The property under appeal is a 19.42 acre tract. Prior to January 1, 2001, the subject property had been classified and assessed as if it were part of an active agricultural endeavor. Respondent reclassified the subject property as residential for tax year 2001 and the property was valued at $24,000. The Board of Equalization affirmed. Complainant asserts that the subject property should be classified as vacant and unused agricultural land.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Audrain County Board of Equalization.
2. The property under appeal is a 19.42 acre tract located on Audrain Road Number 377, identified as parcel number 19-3-05-0-000-004.08. The property is located approximately 4 miles northwest of Mexico, Missouri on a gravel road, approximately one and one-half miles from a paved road. The land is primarily trees, brush and creek with no structures of any kind. Because of the topography of this parcel, most of it is not suitable for building. However, there is a three to four acre area at the front of the parcel, abutting the road, that is suitable for residential improvement.
3. The subject property was originally a part of a 93 acre farm. As recently as 1996 and 1997, the property was used to graze cattle. During 1997, a developer purchased the farm and proceeded to subdivide it into seven smaller tracts. The tracts are of various sizes with the smallest being a little less than 10 acres.
4. Five of the seven parcels comprising this subdivision have had residences built upon them within the last three years. Of the original seven parcels, only the subject property and one other have not had further residential improvements.
5. Complainant purchased the subject property in December, 1998, for $24,000. Complainant has made no agricultural use of the property, and no agricultural use has been made of the property since the time it was purchased for development into a residential subdivision. Complainant has cleared some brush from the land and has used the land for camping and as a “retreat.”
6. The immediate most suitable economic use of the subject property is for residential improvement. During the time that Complainant has owned the property, it has been used as a residential “retreat.” Prior to Complainant’s purchase, the property was used by the developer as a residential lot. The location of the property within a residential subdivision and its access to utilities make it suitable for residential development. The size of the property and its location in close proximity to a public thoroughfare also make it suitable for residential development. Agricultural use of the property is remote past use and “vacant and unused agricultural land” is not the immediate most suitable economic use of the property.
CONCLUSIONS OF LAW AND DISCUSSION
Classification of Property
All real property in Missouri falls into one of three categories. Residential property includes all real property improved by a structure which is used or intended to be used for residential living. Agricultural and horticultural property includes all real property used for agricultural purposes and devoted primarily to the raising of crops or livestock. All property whose use is neither residential nor agricultural falls into the third category of “utility, industrial, commercial, railroad, and other real property.” Section 137.016.1, RSMo.
As set out in Section 137.016.5, RSMo, property which is vacant, unused, or held for future use and for which a determination of its classification cannot be made from the definitions set out in subsection 1 of Section 137.016, RSMo, “. . .shall be classified according to its immediate most suitable economic use, which use shall be determined after consideration of:
(1) Immediate prior use, if any, of such property;
(2) Location of such property;
(3) Zoning classification of such property; except that, such zoning classification shall not be considered conclusive if, upon consideration of all factors, it is determined that such zoning classification does not reflect the immediate most suitable economic use of the property;
(4) Other legal restrictions on the use of such property;
(5) Availability of water, electricity, gas, sewers, street lighting, and other public services for such property;
(6) Size of such property;
(7) Access of such property to public thoroughfares; and
(8) Any other factors relevant to a determination of the immediate most suitable economic use of the land.”
Burden of Proof
In order to prevail, Complainant must present substantial and persuasive evidence supporting his allegation that the subject property has been misclassified. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). 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. Brooks v. General Motors Assembly Division, 27 S.W.2d 50, 53 (Mo. App. 1975).
Complainant Failed to Prove Misclassification
Complainant argues that the subject property should be classified as vacant and unused agricultural land and assessed at 12% of market value. Complainant cites Hein v. Boley, STC Appeals Number 99-30195 and 99-30196, for the proposition that agricultural property does not necessarily lose its agricultural classification merely because it is no longer actively farmed.
Hein is distinguishable upon its facts. In that case, the subject property had been actively farmed for a number of years. For a short period of time, farming operations ceased because of restrictions placed upon access. During this period, Respondent sought to change the classification of the property because of its close proximity to major commercial development. However, we found that the proper classification of the property was as vacant and unused agricultural land.
Although the property in Hein had a potential future use as commercial property, that future use was not feasible within the immediate assessment cycle. The evidence in Hein was that commercial development in the immediate neighborhood was through the use of tax increment financing provided by the City of Independence. Respondent’s own evidence was that, once a decision was made to attempt a commercial development of Complainant’s property, the time required to receive city approval was one and one-half to two and one-half years. No development plan was pending for Complainant’s property and there was a complete absence of any evidence to suggest that Complainant’s property was being sought for commercial development.
At the time of the appeal, the property was virtually landlocked, having no access to public thoroughfares and having no utilities or other amenities which would make the property suitable for commercial development in the immediate future. Also, the property was never subdivided or rezoned for a different use; had never been marketed for a different use and, at the time of hearing, the taxpayer had contracted for additional farming activities on the property.
In contrast, Complainant’s property had not had an agricultural use since the time that it was purchased and subdivided into residential building lots. Arguably, under Section 137.021.3, RSMo, Respondent should have reclassified the subject property on the next January following the split off. However, that error not withstanding, it is clear that the proper classification for the subject property at this time is as residential property.
While it is true that a remote past use of the property may have been for farming operations, the current use of the property is for a residential retreat and it is clear that the highest and best use of the subject property on the tax day (the immediate most suitable economic use as contemplated in Section 137.016.5, RSMo) is for residential development. The property is located within a subdivision of residential properties; it has all of the amenities necessary for residential development; it has access to public thoroughfares and it is of a size that is more appropriate for residential development than for agricultural use.
Therefore, we find that the correct classification for the property is for residential use.
The classification made by the assessor and approved by the Board of Equalization, is AFFIRMED.
A party may file with the Commission an application for review of a hearing officer decision within thirty (30) days of the mailing of such decision. The application shall contain specific detailed grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial.
If an application for review of a hearing officer decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Audrain 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. If any protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 4, 2002.
STATE TAX COMMISSION OF MISSOURI