State Tax Commission of Missouri
RONALD & CHARLENE NELSON,)
)
Complainants,)
)
v.) Appeal Number 10-50502
)
DAVID STOKELY, ASSESSOR,)
CHRISTIAN COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Christian County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax year 2010 is set at $433,200, residential assessed value of $82,310.Complainant Ronald Nelson appeared pro se.Respondent appeared in person and by County Counselor John Housley.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation, the decision of the Christian County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2010.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 Christian County Board of Equalization.A hearing was conducted on December 7, 2010, at the Christian County Courthouse, Ozark, Missouri.
2.Assessment.The Assessor appraised the property under appeal at $433,200, a residential assessed value of $82,310.The Board sustained the assessment.[1]
3.Subject Property.The subject property is located at 2034 N. Prato Court, Nixa, Missouri.The property is identified by map parcel number 5-7-35-20208.The property consists of .68 of an acre lot improved by a single-family residence containing a base gross living area of 3655 square feet and an adjusted gross living area of 4540.The appraised assessed value was increased from 2009 to 2010 due to the completion of the structure.[2]
4.Complainant’s Evidence.Mr. Nelson testified on behalf of Complainants.He stated his opinion of value as of January 1, 2010, to be $327,123.The opinion of value was based on an average of per square foot sales prices for homes that had sold in 2009 and 2010 and the general condition of the subject development being in bankruptcy.The Complainant testified that the property had been appraised in 2010 for a bank loan at $420,000.
He offered into evidence Exhibit A.Exhibit A consisted of the following documents.
|
EXHIBIT |
DESCRIPTION |
DISPOSITION |
|
A |
Cover Outline |
|
|
A-1 |
Market Research |
|
|
A-2 |
Floor Plan and Photographs |
Received |
|
A-3 |
Notices of Change in Assessment |
Received |
|
A-4 |
Comparison of Appraisals in subdivision |
Received |
|
A-5 |
Photograph of subdivision entrance and pool house |
Excluded |
There was evidence of new construction and improvement during 2009, which resulted in the completion of the subject house.[5]Therefore the assessed value for 2010 is based upon what would have been the appraised value of the completed home as if it had so existed on January 1, 2009.[6]
Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2010, to be $327,123, as proposed.
5.Respondent’s Evidence.Respondent presented the testimony of Marian Matthews, Deputy Assessor.She testified to the valuation history of the subject property.Respondent offered into evidence Exhibit 1[7] which was received.
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.[8]
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.[9]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[10]In an overvaluation appeal, true value in money for the property being appealed
must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[11]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.The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[12]Complainant failed to present substantial and persuasive evidence that rebutted the presumption of correct assessment and established the fair market value of the property under appeal.
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.[13]True value in money is defined in terms of value in exchange and not value in use.[14]It is the fair market value of the subject property on the valuation date.[15]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.
6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.[16]
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.[17]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.[18]Complainant did not present an opinion of value developed from any of the recognized and accepted appraisal methodologies.
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, 2009.[19]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.”[20]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[21]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.[22]
The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[24]The owner of the subject property cannot testify regarding comparable sales without being qualified as an expert on valuation of real estate.[25]
Mr. Nelson gave his opinion of value for the Complainants’ property to be $327,123.This amount was arrived at by calculating the average per square foot sale price of seven properties which had sold between June 2009 and January 2010.This is not an accepted procedure for appraising property.Mr. Nelson was not qualified as an expert in appraisal of real estate and therefore could not testify as to the comparability of the seven properties which he sued to conclude an average per square foot selling price.Because the opinion of value presented by the owner was not based upon proper elements and a proper foundation, it has no probative value.There is no substantive evidence to rebut the presumption that the Board’s valuation was correct.Accordingly, it must be affirmed.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Christian County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year 2010 is set at $82,310.
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.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 application for review is based will result in summary denial. [26]
Disputed Taxes
The Collector of Christian 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 24, 2011.
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 24th day of January, 2011, to:Ronald Nelson, 2034 N. Prato Court, Nixa, MO 65714, Complainant; John Housley, 901 St. Louis, 20th Floor, Springfield, MO 65806, Attorney for Respondent; David Stokely, Assessor, 100 W. Church, Room 301, Ozark, MO 65721-0334; Kay Brown, Clerk, 100 W. Church, Room 206, Ozark, MO 65721-0549; Ted Nichols, Collector, P.O. Box 579, Ozark, MO 65721.
___________________________
Barbara Heller
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
[3] Those parts of the Cover Outline which referenced matters relating to other excluded parts of the exhibit are likewise stricken from the Cover Outline.
[4] Objection was made on ground that the witness was not an expert in the appraisal of real property and that the methodology propounded was not an accepted methodology for the appraisal of real property in an appeal before the Commission. Objection was sustained.Exhibit A-1 was excluded from evidence and maintained in the case file only as an offer of proof.
[7] Exhibit 1 consisted of a summary of the assessment history of the property, photographs and a floor plan of the subject, the property record card for the subject, a copy pages 1, 3 & 4 of the pamphlet – The Property Tax in Missouri, a comparison of Assessor’s appraised values on the subject and six neighboring properties in the subject subdivision and a copy of the 2010 Change Notice.
[11] 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)
[12] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[13] 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).
[14] 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).
[16] 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.
[17] 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).
[18] 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).
[20] 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).
[23] Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).
[24] Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).