State Tax Commission of Missouri
SACO AUTO & SUNSET AUTO CO.,)
)
Complainants,)
)
v. ) Appeal No.09-12888 & 09-12889
)
JAKE ZIMMERMAN, ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decisions of the St. Louis County Board of Equalization sustaining the assessments made by the Assessor are SET ASIDE.Complainants present substantial and persuasive evidence to rebut the presumptions of correct assessments by the Board of Equalization and establish true value in money for the properties under appeal.
True value in money for the subject property in Appeal 09-12888 for tax years 2009 and 2010 is set at $3,950,000, commercial assessed value of $1,264,000.
True value in money for the subject property in Appeal 09-12889 for tax years 2009 and 2010 is set at $1,050,000, commercial assessed value of $336,000.
Complainants appeared by Counsel, Thomas Rynard, Blitz, Bardgett & Deutsch, L.C., Jefferson City, Mo.
Respondent appeared by Associate County Counselor, Robert Fox.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainants appeal, on the ground of overvaluation, the decisions of the St. Louis County Board of Equalization, which sustained the valuations of the subject property.The Commission takes these appeals to determine the true value in money for the subject properties on January 1, 2009.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.Complainants timely appealed to the State Tax Commission from the decisions of the St. Louis County Board of Equalization.A hearing was conducted on May 10, 2012, at the St. Louis County Government Center, Clayton, Missouri.
2.Subject Property.The subject property in Appeal 09-12888 is located at 11700 Gravois Road, St. Louis, Missouri.It is identified by locator number 27L130484.The subject Property in Appeal 09-12889 is located at 4858 S. Lindbergh Blvd, St. Louis, Missouri.It is identified by locator number 27L130473.The two properties adjoin each other and are operated as a single economic unit.[1] A complete description of the properties, with photographs is found in Exhibit B.[2]
3.Assessments.The subject property in Appeal 09-12888 was appraised by the Assessor at $5,156,900, assessed commercial value of $1,650,200.The subject property in Appeal 09-12888 was appraised by the Assessor at $1,340,700, assessed commercial value of $429,020.The assessments were sustained by the Board.[3]
4.Complainants’ Evidence.The following exhibits were received into evidence on behalf of Complainants:
|
EXHIBIT |
DESCRIPTION |
|
A |
|
|
B |
Summary Appraisal Report – Douglas A. Zink |
|
C |
Written Direct Testimony – Douglas A. Zink |
Mr. Zink also testified at the evidentiary hearing.[5]The appraiser concluded values under the cost, sales comparison, and income approaches to arrive at his final reconciled value for the combined properties of $5,000,000.[6]
There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[7]
Complainants’ evidence[8] was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money of the properties combined as a single economic unit as of January 1, 2009, to be $5,000,000.
5.Respondent’s Evidence.Respondent presented no evidence, and rested upon the presumption of correct assessment by the Board. See, Presumption In Appeals, infra.
6.Allocation of Value:The total combined appraised value by the Assessor for the two parcels was $6,497,600.The percentage of value attributed to the property in Appeal 09-12888 was 79%.The percentage of value attributed to the property in Appeal 09-12889 was 21%.[9]The determination of value will be allocated between the two parcels on the 79-21 ratio.
The true value in money of the property in Appeal 09-12888 is $3,950,000, a commercial assessed value of $1,264,000.[10]
The true value in money of the property in Appeal 09-12889 is $1,050,000, a commercial assessed value of $336,000.[11]
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]
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.[13]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.[14]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.The only evidence of value presented in this appeal consisted of the appraisal report and testimony of the appraiser received on behalf of Complainants.Value must be concluded based upon that evidence.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[15]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.[16]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.[17]Upon presentation of the Complainant’s evidence[18] the presumption in this appeal disappeared.The submission of the appraisal report, performed by a state certified real estate appraiser, established prima facie that the Board’s value was in error.The appraisal established what the fair market value that should have been placed on the property.No evidence was presented that rebutted the conclusion of value in Complainants’ appraisal.The case is decided free of the presumption.
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.[19]True value in money is defined in terms of value in exchange and not value in use.[20]It is the fair market value of the subject property on the valuation date.[21]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.[22]
Complainant’s appraiser valued the property under the Standard For Valuation.[23]
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.[24]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.[25]Complainant presented an opinion of value based upon an appraisal of the subject property which developed the cost, sales comparison and income approaches to value.An opinion of value was concluded under each approach.Complainants’ appraiser then performed his Reconciliation of Value to arrive at his final conclusion of $5,000,000.
Opinion Testimony by Experts
If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.
The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[26]
Appraiser Douglas A. Zink possessed the education, training and experience to testify as an expert on the appraisal of the subject real estate before the State Tax Commission of Missouri.[27] The Zink appraisal and testimony were based upon data of the type reasonably relied upon by real estate appraisers in arriving at a conclusion of value.The appraiser performed his appraisal and arrived on his conclusions of value for each approach and the final conclusion of value in accordance with generally accepted and recognized real estate appraisal practice.The appraisal was developed in conformity with USPAP.[28]There is no reasonable basis upon which the Hearing Officer can ignore and reject the conclusion of value reached by Mr. Zink.
Complainants’ Prove Value of $5,000,000
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.[29]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 Complainants bear the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[30]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.
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[31]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.[32]
Complainants’ evidence cleared the bar of substantial and persuasive.The presumption of correct assessment by the Board was rebutted.The true value in money was established.Decision is rendered in favor of Complainants.The true value in money for the two parcels as a single economic unit is $5,000,000.
ORDER
The assessed valuations for the subject properties as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day are SET ASIDE.
The assessed value for the subject property in Appeal 09-12888 for tax years 2009 and 2010 is set at $1,264,000.
The assessed value for the subject property in Appeal 09-12889 for tax years 2009 and 2010 is set at $336,000.
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. [33]
Disputed Taxes
The Collector of St. Louis 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 August 8, 2012.
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 8thday of August, 2012, to:Thomas Rynard, 308 E. High Street, Suite 301, Jefferson City, MO 65101, Attorney for Complainant; Robert Fox, Associate County Counselor, Attorney for Respondent, 41 South Central Avenue, Clayton, MO 63105; Jake Zimmerman, Assessor, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
___________________________
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
[2] Subject Photographs – pp. iv – xi; Summary of Salient Facts – p. xii; Site Map – p. 37; Site Analysis – p. 38; Improvements Analysis, p. 41
[3] Complaints for Review of Assessment; Board Decision Letters; Exhibit B – Tax and Assessment Data – p. 45.Commercial property is assessed at 32% of its appraised value (true value in money or fair market value) – Section 137.115.5 RSMo.
[6] Exhibit B: $5,200,000 – Land Value, pp. 48 – 51; Cost Approach, pp. 52 – 53; Sales Comparison Approach, pp. 54 – 56; Income Capitalization Approach, pp. 57 – 65; Reconciliation of Value, p. 66
[9] $5,156,900 ÷ $6,497,600 = .7936, rounded to .79.$1,340,700 ÷ $6,497,600 = .2063, rounded to .21
[10] $5,000,000 x .79 = $3,950,000 x .32 = $1,264,000.
[11] $5,000,000 x .21 = $1,050,000 x .32 = $336,000.[12] Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
[13] Article X, Sections 4(a) and 4(b), Mo. Const. of 1945
[14] Section 137.115.5, RSMo
[15] 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)
[16] 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.
[17] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[18] Exhibit B; Testimony of Complainant’s Expert Witness at hearing
[19] 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).
[20] 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).
[21] Hermel, supra.
[22] 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.
[23] Exhibit B: p. 2 – Purpose of the Appraisal; Addenda A – Glossary of Terms – market value
[24] 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).
[25] 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).
[26] Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).
[27] Exhibit A; Exhibit B: Addendum H – Qualifications of Douglas A. Zink; Exhibit C: Q & A 2 – 15
[28] Exhibit C: Q & A 36, 46, 53; 61, 65, & 70; Exhibit B – Cover Letter, p. 2 (USPAP – Uniform Standards of Professional Appraisal Practice), p. iii – Certification of Appraisal, Items 1 – 9.
[29] Hermel, supra.
[30] 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).
[31] 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.” Blacks at 1201. Substantial 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.
[32] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
[33] Section 138.432, RSMo.