State Tax Commission of Missouri
SINCLAIR RESEARCH CENTER, INC.,)
v.)Appeal No.05-46501 & 06-46500
RONALD CRAIGHEAD, ASSESSOR,)
CALLAWAY COUNTY, MISSOURI,)
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On December 20, 2006, Senior Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) setting aside the assessment by the Callaway County Board of Equalization.
Complainant timely filed its Application for Review of the Decision.Respondent timely filed his Response.
Complainant files its Application for Review on the sole ground that the Hearing Officer erred in not making an award of costs and reasonable attorney’s fees to Complainant pursuant to the mandate found in R. S. Mo. §138.430.6.The Commission finds Complainant’s point not well taken.
The cited statute reads as follows:
“6. If an assessor classifies real property under a classification that is contrary to or in conflict with a determination by the state tax commission or a court of competent jurisdiction of said property, the taxpayer shall be awarded costs of appeal and reasonable attorney’s fees on a challenge of the assessor’s determination.”§138.430, RSMo.
The statute does not apply to the factual and procedural situation in this case.The Commission had not previously determined the classification of the property under appeal accordingly the Assessor could not have classified it “contrary to or in conflict with a determination” of the Commission.Since there had been no prior classification by the Commission under the existing use of the property as of January 1, 2005, and January 1, 2006, the Assessor could not have acted in contravention of any Commission determination.Accordingly, the provision of subsection 6 providing for awarding of costs and attorney’s fees was not triggered in this instance.
The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer to not award cost and attorney’s fees should be reversed or modified.Accordingly, the Decision is affirmed.
Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.
If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts.If no judicial review is made within thirty (30) days, this decision and order is deemed final and the Collector of Callaway 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 or all 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.
SO ORDERED March 14, 2007.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jennifer Tidwell, Commissioner
Charles Nordwald, Commissioner
DECISION AND ORDER
Decisions of the Callaway County Board of Equalization sustaining the assessment made by the Assessor are SET ASIDE.Hearing Officer finds presumptions of correct assessment rebutted.
True value in money for the subject property for tax year 2005 is set at $1,243,390; assessed value of $309,639:$256,672 – Commercial; $52,967 – Agricultural.
True value in money for the subject property for tax year 2006 is set at $1,243,390; $304,189:$247,971 – Commercial; $56,218 – Agricultural.
Complainant represented by Counsel, Jason D. Simmons,Columbia,Missouri.
Respondent represented by Counsel, Robert Sterner, Prosecuting Attorney.
Case decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine the correct classification for the property under appeal on January 1, 2005, and January 1, 2006.Specifically, the classification of five buildings:two (2)- 40’ x 160’ and two (2) 70’ x 160’ – Hog Production Buildings – Hog Barns – for 2005 and 2006; and one (1) Large Animal Building – Horse Barn – for 2006.
Complainant appeals, on the ground of misclassification, the decisions of the Callaway County Board of Equalization, which sustained the valuations and classifications of the subject property.The Assessor determined an appraised value of $1,243,390, assessed value of $384,790 as agricultural and commercial property for Complainant’s entire property.Complainant appealed the commercial classification on four Hog Production Buildings for 2005 and 2006 and the commercial classification of oneLargeAnimalBuildingfor 2006.Appraised values were not challenged.
Respondent waived hearing and agreed to submit case on exhibits and written direct testimony filed by Complainant.Complainant’s Brief filed October 20, 2006.Respondent was given until November 20, 2006, to file Respondent’s Brief.No Respondent’s Brief was filed.
The Hearing Officer, having considered all of the competent evidence upon the whole record and Complainant’s Brief enters the following Decision and Order.
Complainant filed the following exhibits and written direct testimony in response to the Commission Scheduling Order.
Exhibit 1 – Diagram of Sinclair Research Center and building diagrams (3 pages)
Exhibit 2 – General Journal Transactions, dated 6/21/06, 9/12/05, 12/14/05, 11/17/05 & 9/14/04 (6 pages)
Exhibit 3 – Record of acquisition, Disposition or Transportation of Animals Forms (3 pages)
Exhibit 4 – Copies of invoices and Shipper’s Certification (10 pages)
Exhibit 5 – Copies of Property Record Cards on subject property (10 pages)
Exhibit 6 – Written direct testimony of Maureen Hodges, Administrator, Sinclair Research Center, Inc
Exhibit 7 – Written direct testimony of Guy Bouchard, Veterinarian, Sinclair Research Center, Inc
Complainant also filed with its Brief the following exhibits.
Exhibit B-1 – Complainant’s Request for Admissions, with Respondent’s Responses, signed by Respondent on April 28, 2006.
Exhibit B-2 – Complainant’s First Interrogatories and First Request for Production of Documents, with Respondent’s Answers, signed by Respondent on April 28, 2006.
Exhibit B-2A – First Supplemental Responses to First Interrogatories and First Request for Production of Documents, signed by Respondent on June 9, 2006.
Complainant’s Brief put forth basic facts related to the actual use of the Hog Barns by complainant during 2005 and 2006.Complainant also put forth essential facts as to the change in use of the Horse Barn in late 2005 to support its claim for a reclassification based on change in use for 2006 of this facility.
Complainant’s argument is that the use of the Hog Barns in 2005 and 2006 and the use of the Horse Barn as of January 1, 2006, met the statutory definition for agricultural property.Specifically with regard to the Hog Barns, that miniature swine are livestock and that Complainant’s Hog Barns are used for the feeding, breeding and management of livestock. Likewise, the Horse Barn was used in 2006 for the feeding, breeding and management of horses.
Respondent did not submit exhibits, written direct testimony or a Reply Brief.No objection was made to assertions put forth in Complainant’s Brief as to the change in use for theLargeAnimalFacilityBuilding– Horse Barn.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Callaway County Board of Equalization.
2.Complainant’s property is located at562 State RouteDD,Auxvasse,Missouri.
Complainant’s property is identified by parcel number 04-03.0-07.0-00-000-003.000.The property being appealed as to its classification as commercial property consists of two (2)- 40’ x 160’ and two (2) 70’ x 160’ – Hog Production Buildings (Hog Barns) for 2005 and 2006 and the classification of one (1) Large Animal Building (Horse Barn) for 2006.
3.The appraised value for the four Hog Barns for 2005 and 2006 was $375,720.Assessed value as commercial property was $120,230.Assessed value as agricultural property would be $45,086, rounded to $45,090.Exhibits 5 & B-1.
4.The appraised value for the Horse Barn for 2005 and 2006 was $27,190. Assessed value as commercial property was $8,700.Assessed value as agricultural property would be $3,263. Exhibit 5.
5.The total appraised value by the Assessor for 2005 and 2006 for Complainant’s entire facility was $1,243,390: $1,177,820 – Commercial; $65,570 – Agricultural.
6.The total appraised value for Complainant’s facility for 2005 is $1,243,390: $802,100 – Commercial ($16,900 – Land; $785,200 – Structures); $441,390 ($65,570 – Land; $375,720 – Structures (Hog Barns)).
7.The assessed value for Complainant’s property for 2005 is $309,639:$256,672 – Commercial; $52,967 – Agricultural.
8.The total appraised value for Complainant’s facility for 2006 is $1,243,390: $774,910 – Commercial ($16,900 – Land; $758,010 – Structures); $468,480 ($65,570 – Land; $402,910 – Structures (Hog Barns-$375,720 & Horse Barn-27,190)).
9.The assessed value for Complainant’s property for 2006 is $304,189:$247,971 – Commercial; $56,218 – Agricultural.
10.The purpose for which the Hog Barns was constructed was the production of miniature swine.The Barns are not used for research purposes, but are used for production of miniature swine.The Barns are devoted entirely to the breeding, feeding and management of miniature swine.The Barns are not suitable as they existed in 2005 and 2006 for the type of research that SinclairResearchCenterperforms.No research is done in any of the Barns.Complainant’s Barns serve the same purpose as any other hog confinement facilities, but the buildings are maintained in a much cleaner condition.Exhibits 6 & 7.
11.Miniature swine are produced using the same standards as for domestic swine (pork production) promulgated by the USDA.Miniature swine are smaller then domestic hogs.The primary purpose in raising them is to use for research, however they also are used for hunting, food, and food and fiber research.Miniature and domestic swine are the same genus, same origin.They have the same ancestors.Miniature swine are livestock.Exhibit 7.
Classification of Hog Barns
12.The Hog Barns meet the statutory definition of agricultural property, as they are buildings which are customarily associated with farming and agricultural.Specifically, they are buildings used in the feeding, breeding and management of livestock.
Classification of Horse Barn
13.The Horse Barn (Large Animal Facility Bldg 51 – Exhibit 1) is suitable for the boarding and management of horses.No research of any kind was performed in the Horse Barn in 2006.The Horse Barn was used in 2006 solely for the boarding and management of horses.Horses are livestock.Complainant’s Brief, p. 6.
CONCLUSIONS OF LAW AND DECISION
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.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.Section 138.431.4, RSMo.
Presumptions in Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.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).
The Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005).Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
In the present case, the presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor’s or Board’s valuation is erroneous and what the correct classification should be.Snider, Hermel & Cupples Hesse, supra.
Question of Law – Agricultural Use of Property
The issue presented to the Commission in the present case is a question of law addressing the classification of the structures under appeal.The fair market or appraised value (true value in money) is not in dispute.Findings of Fact 3 & 4, supra.The point of contention is the classification of the structures which comprise the four hog barns in 2005 and 2006 and the horse barn in 2006.
The determination of the issue of classification is controlled by section 137.016.1(2).The portions of the statute which are applicable to the present appeal read as follows:
“Agricultural and horticultural property”, all real property used for agricultural purposes and devoted primarily to the raising and harvesting of crops; to the feeding, breeding and management of livestock which shall include breeding and boarding of horses, to dairying, or to any other combination thereof; and buildings and structures customarily associated with farming, agricultural and horticultural uses.”
If the subject structures come within this definition they must as a matter of law be assessed at twelve percent of their true value in money (appraised value).§137.115.5(2), RSMo.
The evidence, without rebuttal or objection, established that in 2005 and 2006 the four hog barns were used for the feeding, breeding and management of livestock – miniature swine.The Horse Barn was used in 2006 for the feeding, breeding and management of livestock – horses.These uses bring the subject structures within the statutory definition requiring they be assessed as agricultural property.
The fact that the miniature swine may be used and apparently are primarily used for research, instead of being consumed as food for humans or other uses more generally associated with standard sized hogs is not controlling in this case.The statute makes no provision for the end use of the livestock being produced – fed, bred and managed.As applied to the structures under appeal, the statute only requires that they be devoted primarily to the feeding, breeding and management of livestock.
In like manner the nature or character of the property owner or the business otherwise conducted by the taxpayer is not controlling or even applicable to classification of the subject structures.Property must be classified under the statute based upon its use and use alone.The primary use, in fact the sole use of the subject structures – hog barns and horse barn – is the raising of livestock.The fact that various other structures on Complainant’s property are devoted to non-agricultural uses is irrelevant under the statute for assigning a classification to the buildings.As buildings used for an agricultural purpose, the classification of the buildings must be agricultural.Therefore, these buildings must be assessed at twelve (12%) percent of the appraised value assigned by the Assessor.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forCallawayCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2005 is set at $309,639:$256,672 – Commercial; $52,967 – Agricultural.
The assessed value for the subject property for tax year 2006 is set at $304,189:$247,971 – Commercial; $56,218 – Agricultural.
A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.The application shall contain specific 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.Section 138.432, RSMo 2000.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with these appeals 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 Callaway 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 these appeals.If any or all 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 December 20, 2006.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor, Senior Hearing Officer