STATE TAX COMMISSION OF MISSOURI
|v.||)||Appeal No. 17-10080|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,
DECISION AND ORDER
The decision of the St. Louis County Board of Equalization (BOE) is AFFIRMED. Complainant Sarah George (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Complainant appeared pro se.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel Steve Robson.
Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).
Complainant appealed on the ground of overvaluation. Respondent initially set the true value in money (TVM) of the subject property at $373,800, as residential property, as of January 1, 2017. The BOE valued the subject property at $358,400, thereby lowering Respondent’s valuation. The State Tax Commission (STC) takes this appeal to determine the TVM for the subject property as of January 1, 2017.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on March 21, 2018, at the St. Louis County Government Building, 41 South Central Avenue, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number 23L430384. It is further identified as 453 Elm Avenue, Glendale, St. Louis County, Missouri. (Complaint; Exhibit 1)
- Description of Subject Property. The subject property consists of .4386 acres (approximately 19,105 square feet) of land improved by a 1,222 square-foot single-family, split foyer-style home built in 1959. (Exhibit E) The home includes three bedrooms; two full bathrooms; a full basement with 800 square feet of finished area; one fireplace; a porch; a deck; an attached garage; and a brick exterior. (Exhibit E)
- Assessment. Respondent set a TVM for the subject property of $373,800, residential, as of January 1, 2017.
- Board of Equalization. The BOE set a TVM for the subject property of $358,400, residential, as of January 1, 2017.
- Complainant’s Evidence. Complainant opined that the TVM of the subject property was $346,000 as of January 1, 2017. To support her opinion of value, Complainant offered the following exhibits:
|Exhibit A||Complainant’s letter dated March 19, 2018, stating reasoning for appeal|
|Exhibit B||1997 survey map of subject property showing easements and property’s boundary lines|
|Exhibit C||Aerial parcel map showing subject property’s boundary lines and surrounding properties|
|Exhibit D||List of sales of split foyer properties in the neighborhood of the subject property noting two specific properties, 1245 Brownell Avenue and 937 Hawbrook Road|
|Exhibit E||List of Respondent’s comparable sales for the subject property with Complainant’s notation that two of the sales should not be considered comparable|
|Exhibit F||Property record cards for three properties in the neighborhood of the subject property with Complainant’s notation that the properties are “larger, better condition” but were assessed lower than the subject property|
|Exhibit G||Property record card for the subject property with Complainant’s notation that it incorrectly reports the total living area is 2,022 square feet|
|Exhibit H||Color photographs of mold in the basement of the subject property and of a creek and utility easements running across the subject property|
Respondent did not object to Complainant’s exhibits, all of which were admitted into the record.
Complainant testified that she had purchased the property in 2003 for $292,500. Complainant testified that the subject property had been listed with a realtor and had been publicly advertised, indications of an open market sale. Complainant testified that the subject property was not encumbered by a mortgage. Complaint testified that, if she were to list the subject property for sale, she would list it for $346,000. Complainant testified that no offers had been made to purchase the property. Complainant testified that the property had not been appraised in the three years preceding the evidentiary hearing. Complainant testified that she had not made any improvements to the subject property between January 1, 2015, and January 1, 2017.
In conjunction with the presentation of her exhibits, Complainant testified that Respondent’s public website had erroneously reported the total living area of the home of the subject property as 2,022 square feet. Complainant testified that the garage, deck, and porch are not living area. Complainant testified that the garage should not be included as living area. In response to a question from the Hearing Officer, Complainant testified that the garage is attached to the home of the subject property with an open porch walkway. Complainant further testified that a split foyer-style home has a foyer with stairs that ascend a level and descend a level while a split level-style home has two distinct levels.
On cross examination, Complainant testified that she is not a certified appraiser and has no formal training for making adjustments to the sale prices of properties. Complainant testified that with regard to Exhibit D she had obtained data of every sale of split levels from Respondent’s public website. Complainant reiterated that the total living area of the home of the subject property was 1,222 square feet.
- Respondent’s Evidence. Respondent advocated affirming the BOE’s determination of TVM, $358,400. To support his opinion of value, Respondent offered the following exhibit:
|Exhibit 1||BOE Notice of Decision valuing the subject property at $358,400, residential, as of January 1, 2017|
Complainant did not object to Respondent’s exhibit, which was admitted into the record.
Respondent also presented the testimony of Robert Koch (Mr. Koch). Mr. Koch testified that he is employed as the Appraisal Supervisor in Respondent’s office. Mr. Koch testified that Complainant’s Exhibit G, the property record card for the subject property, showed that total living area of the subject property is 2,022 square feet. Mr. Koch testified that the total living area is the sum of the square footage on the main floor (1,222) plus the finished square footage contained in the basement (800). Mr. Koch testified that the square footage of the garage is not included in the calculation of total living area.
- Presumption of Correct Assessment Not Rebutted – True Value in Money Not Established. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the TVM of the subject property to be $346,000, as of January 1, 2017.
CONCLUSIONS OF LAW AND DECISION
The STC has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement. The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the BOE, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Investigation by Hearing Officer
In order to investigate appeals filed with the STC, 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. Section 138.430.2 RSMo (2000) as amended. 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. Id.
During the Evidentiary Hearing, the Hearing Officer inquired of Complainant.
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE – the BOE presumption. The BOE presumption requires the taxpayer to present substantial and persuasive evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then Respondent is required to rebut the BOE presumption. The BOE’s valuation is assumed to be an independent valuation.
In the present appeal, the BOE lowered the initial valuation of Respondent, and Complainant is now seeking to lower the BOE’s assessment; therefore, the BOE presumption applies to Complainant.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.” Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993). “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.” Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. 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, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, 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).
There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC 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.” Westwood Partnership, 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. W.D. 1991).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783. A taxpayer does not meet his burden if evidence on any essential element of his case leaves the STC “in the nebulous twilight of speculation, conjecture and surmise.” See Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. E.D. 1980).
Respondent’s Burden of Proof
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the BOE, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Inc., 564 S.W.2d at 895; Cupples-Hesse, 329 S.W.2d at 702; Brooks, 527 S.W.2d at 53.
In this case, Respondent argued that the BOE’s determination of value was correct and should be affirmed.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
The Hearing Officer, as the trier of fact, may consider the testimony of an expert witness and give it as much weight and credit as deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
Neither Complainant nor Respondent presented any expert testimony.
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. See, Nance v. STC, 18 S.W.3d 611, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). 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. 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. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347.
“Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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.
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.
In this case, Complainant’s evidence was substantial but not persuasive to rebut the presumption of correct assessment by the BOE. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702.
First, Complainant presented Exhibit D to establish that the subject property should be valued similarly to two comparable split foyer-style properties in the same neighborhood as the subject property. Upon closer inspection, however, Exhibit D reveals that the comparable properties were sold in October 2014 and November 2015, respectively – well before the relevant tax date. Without additional evidence validating the sales or showing market-based adjustments to the sale prices of the comparable properties, the trier of fact would be forced to speculate as to whether the sales prices of the comparables reflected the TVM of the subject property on January 1, 2017.
Second, Complainant’s evidence, specifically Exhibit E, challenged Respondent’s initial valuation of the subject property prior to the BOE’s determination of TVM. The BOE lowered Respondent’s initial valuation. Consequently, given that the BOE made an independent determination based upon the evidence before it, the trier of fact cannot now scrutinize Respondent’s initial valuation based upon comparables generated by the computerized mass appraisal system. Notably, Respondent advocated that the BOE’s valuation be affirmed. From this, one can reasonably infer that Respondent acknowledges the initial valuation was incorrect. Even so, based upon the evidence, one cannot reasonably infer that Complainant’s opinion of TVM is correct.
The TVM for the subject property as determined by the BOE is AFFIRMED. The assessed value for the subject property for tax year 2017 is set at $68,096 residential ($358,400 TVM).
Application for Review
A party may file with the STC 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, MO 65102-0146, 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. Section 138.432, RSMo
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 May 11, 2018.
STATE TAX COMMISSION OF MISSOURI
Amy S. Westermann
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 11th day of May, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
 Complainant’s Exhibits B, C, F, and H concerned the utility easements and a creek on the subject property. Exhibit H contained color photographs of the mold on walls and floors of the home’s basement and of the utility lines and the creek running across parts of the land. Exhibit F purported to show the property record cards of comparable properties in the subject property’s neighborhood that had no creek or creek or creek bank but had lower valuations than the subject property. However, there was no evidence assigning a specific negative dollar amount to these conditions, and, thus, this evidence carried no weight in the Hearing Officer’s decision.