Roy & Carla Cagle v. Graves (Linn)

March 3rd, 2014

State Tax Commission of Missouri 

ROY CAGLE, Jr. & CARLA CAGLE,

)

 

 

)

 

Complainants,

)

 

 

)

 

v.

)

Appeal No.13-66500

 

)

 

MARLENE GRAVES, ASSESSOR,

)

 

LINN COUNTY, MISSOURI,

)

 

 

)

 

Respondent.

)

 

 

DECISION AND ORDER 

HOLDING 

Decision of the Linn County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Complainants presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.Evidence on Record was sufficient to establish value for the personal property (motor vehicles) under appeal.

The assessed value of Complainants’ property in Assessor’s Account 4191.000 is set at $204,889.

Complainant, Carla Cagle, appeared pro se.

Respondent appeared pro se.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

Complainants appeal, on the ground of overvaluation, the decision of the Linn County Board of Equalization, which sustained the valuation of the subject property – motor vehicles.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011.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 Linn County Board of Equalization.

2.Evidentiary Hearing.The Evidentiary Hearing was held on December 9, 2013 at the Linn County Courthouse, Linneus, Missouri.

3.Identification & Description of Subject Property.The subject property consists of eleven Over-The-Road Trucks, generally referred to as “tractors”, as in tractor – trailer rigs.The property is shown in the Assessor’s records in Account 4191.000.There is a 2011 Ford Pickup that is also listed in the Assessor’s Personal Property Account for Complainants.The assessment of that vehicle is not challenged.

The trucks are further identified as follows:[1]

TRUCK

TRUCK #

COST

DATE

2013 Freightliner

3147

$108,825.00

6/19/12

2013 Freightliner

3148

$108,825.00

6/19/12

2013 Freightliner

3149

$108,825.00

7/26/12

2013 Freightliner

3150

$108,825.00

8/2/12

2013 Freightliner

5131

$108,825.00

8/22/12

2012 Freightliner

9364

$104,855.00

11/30/11

2012 Freightliner

9365

$104,855.00

11/28/11

2011 Freightliner

4526

$102,853.00

3/18/11

2011 Freightliner

4527

$102,853.00

3/18/11

2011 Peterbilt

13834

$108,107.00

4/29/10

2011 Peterbilt

13835

$108,107.00

4/29/10

 

4.Assessment.The Assessor appraised the property as follows:

TRUCK

TRUCK #

APPRAISED

ASSESSED[2]

2013 Freightliner

3147

$116,880.00

$23,376.00

2013 Freightliner

3148

$116,880.00

$23,376.00

2013 Freightliner

3149

$116,880.00

$23,376.00

2013 Freightliner

3150

$116,880.00

$23,376.00

2013 Freightliner

5131

$116,880.00

$23,376.00

2012 Freightliner

9364

$107,010.00

$21,402.00

2012 Freightliner

9365

$107,010.00

$21,402.00

2011 Freightliner

4526

$96,300.00

$19,260.00

2011 Freightliner

4527

$96,300.00

$19,260.00

2011 Peterbilt

13834

$132,360.00

$26,472.00

2011 Peterbilt

13835

$132,360.00

$26,472.00

 

The Board of Equalization sustained the assessment.[3]

5.Complainants’ Evidence.Complainants offered into evidence the following exhibits, which were received into the record.

EXHIBIT

DESCRIPTION

A

Listing of Trucks[4]

B

Bill of Sale – Truck 3147

C

Bill of Sale – Truck 3148

D

Bill of Sale – Truck 3149

E

Bill of Sale – Truck 3150

F

Bill of Sale – Truck 3151

G

Bill of Sale – Truck 9364

H

Bill of Sale – Truck 9365

I

Bill of Sale – Truck 4526

J

Bill of Sale – Truck 4527

K

Bill of Sale – Trucks 13834 & 13835

L

Statement – Mike Goebel, Midway Freightliner;

NADA July 2013 Guide

M

Check from Sale – Truck 13834 – 5/30/13

N

EFT for Sale of Truck 13845 – 6/26/13

O

NADA – July 2013 Value – 2011 Peterbilt

P

Truckpaper.com – 8/18/13 – 2011 Peterbilt

Q

Truckpaper.com – 8/18/13 – 2011 Freightliner

R

Truckpaper.com – 8/18/13 – 2013 Freightliner

 

Ms. Cagle testified at hearing.The taxpayers proposed values for the (1) 2013 Freightliner Trucks at $88,000 each; (2) 2012 Freightliner Trucks at $76,000 each; 2011 Freightliner Trucks at $62,000 each; and (4) 2011 Peterbilt at $55,000 each.

6.Presumption of Correct Assessment Rebutted.Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and provide the basis for the Hearing Officer to find the true value in money as of January 1, 2013 for the subject property.

7.Respondent’s Evidence.Respondent elected to file no exhibits addressing the issue of the true value in money of the Complainants’ vehicles.

8.Commission Exhibit.At hearing Commission Exhibit 1 – Assessment List – Apportioned Truck & Trailer for Cagle Truck, Inc. was received into evidence upon the request and direction of the Hearing Officer.See, Investigation by Hearing Officer, infra.

9.Apportionment Percentage.The total number of miles operated for 2012 for the eleven vehicles owned by Complainants was 1,539,314.The total number of miles operated in Missouri for 2012 for the eleven vehicles owned by Complainants was 917,962.This results in an apportionment percentage of 59.6., to cover the valuation of the vehicles applicable to Linn County.[5]

10.Appraised Values.The appraised values for Complainants’ vehicles are determined to be, See, Hearing Officer Determines ValueConclusions of Value, infra:

TRUCK

TRUCK #

APPRAISED

2013 Freightliner

3147

$108,825

2013 Freightliner

3148

$108,825

2013 Freightliner

3149

$108,825

2013 Freightliner

3150

$108,825

2013 Freightliner

5131

$108,825

2012 Freightliner

9364

$104,855

2012 Freightliner

9365

$104,855

2011 Freightliner

4526

$63,500

2011 Freightliner

4527

$63,500

2011 Peterbilt

13834

$55,000

2011 Peterbilt

13835

$55,000

 

11.Apportionment Values.The apportionment formula (59.6%) applied to the appraised values results in the apportioned values to be:

TRUCK

TRUCK #

APPRORTIONED

2013 Freightliner

3147

$64,860

2013 Freightliner

3148

$64,860

2013 Freightliner

3149

$64,860

2013 Freightliner

3150

$64,860

2013 Freightliner

5131

$64,860

2012 Freightliner

9364

$62,490

2012 Freightliner

9365

$62,490

2011 Freightliner

4526

$37,850

2011 Freightliner

4527

$37,850

2011 Peterbilt

13834

$32,780

2011 Peterbilt

13835

$32,780

 

12.Assessed Values.The assessed values for Complainants’ vehicles are established by taking the apportionment values times 33 1/3%, value rounded to nearest whole $10.

TRUCK

TRUCK #

ASSESSED

2013 Freightliner

3147

$21,620

2013 Freightliner

3148

$21,620

2013 Freightliner

3149

$21,620

2013 Freightliner

3150

$21,620

2013 Freightliner

5131

$21,620

2012 Freightliner

9364

$20,830

2012 Freightliner

9365

$20,830

2011 Freightliner

4526

$12,620

2011 Freightliner

4527

$12,620

2011 Peterbilt

13834

$10,930

2011 Peterbilt

13835

$10,930

TOTAL

 

$196,860

 

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.[6]

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.[7]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.[8]

Presumption In Appeal

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[9]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.When some substantial evidence is produced by the Complainant, “however slight”, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.[10]The presumption is not evidence of value.

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.[11]Complainants’ evidence met the required standard to rebut the presumption of correct assessment.Although the evidence was no sufficient to establish the values proposed by the taxpayers, it constituted substantial and persuasive evidence upon which the Hearing Officer can conclude values.See, Hearing Officer Determines Values, infra.

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[12]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.[13]

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.[14]True value in money is defined in terms of value in exchange and not value in use.[15]It is the fair market value of the subject property on the valuation date.[16]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.[17] 

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.[18]The Hearing Officer during the evidentiary hearing made inquiry of Complainant, Ms. Cagle and Respondent and Respondent’s Deputy Assessor, Chasity Wilson, for Personal Property.During the course of the questioning of Respondent and Ms. Wilson, the Hearing Officer determined that in order to have a complete record and to ascertain the apportionment of mileage for Missouri, that Assessor’s Assessment List on Complainants’ vehicles be included as part of the record.Accordingly, a copy of the Assessment List was provided to the Hearing Officer at hearing and marked as Commission Exhibit 1.

Apportionment Formula

The assessed valuation of any tractor or trailer as defined in section 301.010 owned by an individual, partner, or member and used in interstate commerce must be apportioned to Missouri based on the ratio of miles traveled in this state to miles traveled in the United States in interstate commerce during the preceding tax year or on the basis of the most recent annual mileage figures available.[19]The State Tax Commission issued its order to all assessors in 1983 to apportion interstate truck assessment.The order remains in effect and was upheld by the Missouri Supreme Court in Beelman Truck Company v. Ste. Genevieve County BOE.[20]The apportionment formula is as follows:Individual Trucks:True Value of the truck x the percent of miles attributable to Missouri x 33 1/3%; Truck Fleets: True Value of all trucks x the percent of Missouri miles of all trucks x 33 1/3%.[21]

Hearing Officer Determines Values

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, 2013.[22]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.”[23]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.

In this instance, the evidence provided by Complainant met the standards of substantial and persuasive to rebut the presumption of correct assessment.It likewise provided substantial and persuasive evidence from which the Hearing Officer can make his determination of value for the vehicles.

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[24]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[25]Ms. Cagle established by her testimony that she is knowledgeable of the values for the trucks which make up the Cagle Truck fleet of vehicles.The Cagles operate their business jointly and Ms. Cagle is involved in the selling and buying of trucks that make up their fleet.She had personal knowledge of the various acquisitions for the fleet as it existed on 1/1/13.This is weighed against the valuation by the Assessor that was derived from utilization of the Vanguard mass appraisal system apparently based upon NADA data.The opinions of value presented for the various trucks by Complainants,[26] according to the testimony of Ms. Cagle rest upon research of the market, NADA, truckpaper.com, and dealers information, to ascertain values for purposes of insuring the individual trucks and the past experience of the Cagles with regard to buying and selling of trucks for their business.However, no supporting data as to exactly how the values proposed were determined was provided.Accordingly, the Hearing Officer is not persuaded that the Taxpayers’ proposed values are reflective of what each of the trucks would have sold for as of 1/1/13.Ms. Cagle also presented truckpaper.com data on 2013 and 2011 trucks for sale as of August, 2013 which are the same models as Complainant’s vehicles.

Conclusions of Values

The acquisition cost or price for the vehicles does have persuasive merit.The five 2013 Freightliners were purchased 4 to 6 months prior to the valuation date.Exhibit R provided information that the same model Freightliner with 77,690 miles was offered for sale at $109,900.Ms. Cagle’s testimony was that their trucks were higher mileage than this vehicle.However, no mileage records for the individual 2013 Freightliners as of 1/1/13 were provided.No additional deduction to account for mileage can be allowed, as the record is devoid of the necessary data that would establish an appropriate amount to be deducted for mileage, if any.The Hearing Officer notes that each of the trucks were purchased new in mid-2012 with minimal mileage, and it is reasonable to conclude that several thousand miles were no doubt put on each truck by 1/1/13.Nevertheless, the Hearing Officer cannot simply assign an arbitrary amount to be deducted to account for the mileage.The Hearing Officer concludes as to the five 2013 Freightliners the acquisition cost of $108,825 per vehicle is appropriate to set as the value for these vehicles.

Likewise, as to the two 2012 Freightliners, the acquisition cost in November of 2011 is concluded as reasonable in the absence of supporting information as to the actual mileage on each of these vehicles as of 1/1/13.Accordingly, these two vehicles are to be given an appraised value of $104,855.

The evidence in the record is that as of 8/18/13, a 2011 Freightliner the same model as Complainants’ trucks was being offered for $63,500.This for sale truck is of a similar mileage as Complainants 2011 vehicles, according to Ms. Cagle.Although again, no records as the actual mileage as of 1/1/13 for the two 2011 trucks was provided.The Hearing Officer concludes value for each of the 2011 Freightliners to be $63,500.

Finally, the 2011 Peterbilt trucks were sold in mid-2013 for $55,000 each.The opinion of Michael Goebel of Midway Freightliner was that the trucks would sell for between $55,000 and $62,000.In this instance the owner’s opinion of value of $55,000 substantiated by the actual sale of the two vehicles for that amount six months after the valuation date is persuasive.The Hearing Officer concludes value for each of the 2011 Peterbilts to be $55,000.

ORDER

The assessed valuations for the subject property as determined by the Assessor and sustained by the Board of Equalization for Linn County for the subject tax day are SET ASIDE.

The assessed value for Complainant’s personal property in Account 4191.000 for tax year 2013 is set as follows:

TRUCK

TRUCK #

ASSESSED

2013 Freightliner

3147

$21,620

2013 Freightliner

3148

$21,620

2013 Freightliner

3149

$21,620

2013 Freightliner

3150

$21,620

2013 Freightliner

5131

$21,620

2012 Freightliner

9364

$20,830

2012 Freightliner

9365

$20,830

2011 Freightliner

4526

$12,620

2011 Freightliner

4527

$12,620

2011 Peterbilt

13834

$10,930

2011 Peterbilt

13835

$10,930

2011 Ford Pickup

 

$8,029

TOTAL

 

$204,889

 

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.

Failure to state specific facts or law upon which the application for review is based will result in summary denial. [27]

Disputed Taxes

The Collector of Linn 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 February 6, 2014.

STATE TAX COMMISSION OFMISSOURI

W. B. Tichenor

Senior Hearing Officer 

 


[1] Exhibits A, B, C, D, E, F, G, H, I, J, & K 

[2] The Assessor applied the apportionment percentage to 33 1/3% of the appraised value, instead of applying it to the appraised value. 

[3] BOE Decision Letter, dtd 7/8/13, attached to Complaint for Review of Assessment 

[4] Truck Identification, Truck Number, Appraised, Assessed, & Taxpayers’ Values, Acquisition Costs and Dates 

[5] Commission Exhibit 1 

[6] Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo. 

[7] Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 

[8] Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money 

[9] 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) 

[10] United Missouri Bank of Kansas City v. March, 650 S.W.2d 678, 680-81 (Mo. App. 1983), citing to State ex rel. Christian v. Lawry, 405 S.W.2d 729, 730 (Mo. App. 1966) and cases therein cited. 

[11] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959) 

[12] See, Cupples-Hesse, supra.

Substantial and persuasive evidence is not an extremely high standard of evidentiary proof.It is the lowest of the three standards for evidence (substantial & persuasive, clear and convincing, and beyond a reasonable doubt).It requires a small amount of evidence to cross the threshold to rebut the presumption of correct assessment by the Board.The definitions, relevant to substantial evidence, do not support a position that substantial and persuasive evidence is an extremely or very high standard.

“Substantial evidence: Evidence that a reasonable mind would accept as adequate to support a conclusion; evidence beyond a scintilla.”Black’s Law Dictionary, Seventh Edition, p. 580

The word scintilla is defined as “1. a spark,2. a particle; the least trace.” Webster’s New World Dictionary, Second College Edition.Black’s definition at 1347 is “A spark or trace <the standard is that there must be more than a scintilla of evidence>.”There must be more than a spark or trace for evidence to have attained the standard of substantial.Once there is something more than a spark or trace the evidence has reached the level of substantial.Substantial evidence and the term preponderance of the evidence are essentially the same.“Preponderance of the evidence.The greater weight of the evidence; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”Black’s at 1201Substantial evidence is that a reasonable mind would accept as adequate to support the conclusion.Preponderance is sufficient to incline a fair and impartial mind to one side of the issue rather than the other, i.e. support the proposed conclusion. 

[13] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975) 

[14] 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) 

[15] 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] Hermel, supra 

[17] 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. 

[18] Section 138.430.2, RSMo 

[19] Section 137.090.2 RSMo 

[20] 861 S.W.2d 557, 560 (Mo. banc 1993) 

[21] State Tax Commission Assessor Manual: pp. II-14 – II-15 

[22] Hermel, supra 

[23] 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) 

[24] 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) 

[25] 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). 

[26] Exhibit A – Taxpayer’s Value 

[27] Section 138.432, RSMo