STATE TAX COMMISSION OF MISSOURI
| STEPHEN SMALL, | ) | |
| ) | ||
| Complainants, | ) | |
| ) | ||
| v. | ) | Appeal No. 19-30000 |
| ) | 29-840-19-18-00-0-00-000 | |
| GAIL MCCANN BEATTY, ASSESSOR, | ) | |
| JACKSON COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) | |
DECISION AND ORDER
HOLDING
The 2015, 2016, 2017, 2018, and 2019 assessment of the subject property is AFFIRMED. Stephen Small (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment.
Complainant, a licensed attorney, appeared pro se.
Gail McCann-Beatty, Assessor, Jackson County, Missouri, (Respondent) appeared by counsel Tamika Logan.
Case heard and decided by Senior Hearing Officer John J. Treu (Hearing Officer).
ISSUE
Complainant appealed on the grounds of exemption, discrimination, and overvaluation. Complainant contends that the improvement on his residential property is not occupied and therefore should not be assessed as improved property pursuant to Section 137.082 RSMo.[1] The State Tax Commission (STC) takes this appeal to determine the application of Section 137.082 whether there was discrimination, and whether the subject property was overvalued.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Authority. Authority over this appeal is proper. Complainant timely appealed to the STC.
- Evidentiary Hearing. The issues were presented at an evidentiary hearing on June 25, 2020, at the Jackson County Courthouse, Kansas City, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number 29-840-19-18-00-0-00-000. It is further identified as 3328 Harrison Street, Kansas City, Jackson County, Missouri. (Exbibits G, H, and 1)
- Description of Subject Property. The subject property consists of a 12,004 square foot lot, improved by a 2 ½ story, 5,364 square-foot, Queen Anne style home. The home has six bedrooms and three full bathrooms. The home was constructed in 1895. In 2004 the home was damaged by tornadic activity, ultimately resulting in water leaks, water damage, mold spores and fungal colonies. (Exbibits G, H, and 1)
- Assessment. The following sets forth the TVM set by the Assessor and BOE for tax years 2015, 2016, 2017, 2018, 2019:
| 2015 | 2016 | 2017 | 2018 | 2019 | |
| Assessor Total TVM | $55,000 | $55,000 | $55,000 | $55,000 | $72,500 |
| Assessor Land Value | $45,000 | $45,000 | $45,000 | $45,000 | $70,000 |
| Assessor Improvement Value | $10,000 | $10,000 | $10,000 | $10,000 | $2,500 |
| BOE Total TVM | $47,500 | $47,500 | $47,500 | $47,500 | $47,500 |
| BOE Land Value | $45,000 | $45,000 | $45,000 | $45,000 | $45,000 |
| BOE Improvement Value | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 |
(Complaints for Review of Assessment, BOE Attachments).
- Complainant’s Evidence. Complainant opined that the subject property’s land value is $7,000 and that the improvement is not subject to assessment based upon Section 137.082, sometimes referred to as the occupancy law. Complainant admitted that he has been living in the home but contended he is limited to living only in one small room to protect the property. To support Complainant’s assertions, Complainant offered as evidence the following:
| Exhibit A | 2015 Tax Payment Receipt |
| Exhibit B | 2016, 2017, and 2018 Tax Payment Receipts |
| Exhibit C | Notice of Intent to Foreclose |
| Exhibit D | Collection Department Letter |
| Exhibit E | Redemption and/or Dismissal of Suit |
| Exhibit F | Documents Relating to Subject Property Improvements Being Removed from Assessment in 2006 |
| Exhibit G | CAMA System Information Regarding Subject Property |
| Exhibit H | Environmental Report of Kingston Environmental Laboratory |
| Exhibit I | Property Account Summary for Another Property |
| Exhibit J | Property Account Summary for Another Property |
| Exhibit K | Court Administrator’s Deed |
Exhibits A through G were admitted without objections. Exhibit H was objected to as the expert was not present for cross-examination. The objection was sustained to the extent of any expert opinions, but the exhibit was otherwise admitted to be given such weight as the Hearing Officer deemed appropriate. Exhibits I, J, and K were objected to but were admitted to be given such weight as the Hearing Officer deemed appropriate.
Complainant testified that the subject property has extensive water damage, mold, and fungal colonies. Complainant did not testify that he was not living in the subject property in 2015, 2016, 2017, 2018, and 2019. Instead, he testified that he lives in the subject property but that upon entering the property he goes directly to one room where he utilizes a window air conditioning unit and space heaters for climate control. Complainant testified that when passing through the house he must endure environmental irritants.
Complainant did not provide evidence based upon any of the three recognized methods for valuing real property of the TVM of the land or improvement of the subject property. Complainant offered no evidence of the average assessment ratio of residential properties in Jackson County, Missouri.
- Respondent’s Evidence. To support Respondent’s opinion of occupancy and assessment, Respondent offered as evidence the following:
| Exhibit 1 | Board of Equalization 2019 Support Report |
Complainant objected to Exhibit 1. Exhibit 1 was admitted to be given such weight as the Hearing Officer deemed appropriate.
Darlene Lackey, the residential appraisal supervisor for Jackson County, Missouri, testified a determination as to occupancy was made by the assessment department, based upon a conversation with Complainant where Complainant acknowledged staying in the home, that Complainant was living in the subject property at all times pertinent to this appeal.
- Presumption of Correct Assessment Not Rebutted. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment.
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
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.
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.
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. 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.
Occupancy
Section 137.082 states in pertinent part:
- Notwithstanding the provisions of sections 137.075 and 137.080 to the contrary, a building or other structure classified as residential property pursuant to section 137.016 newly constructed and occupied on any parcel of real property shall be assessed and taxed on such assessed valuation as of the first day of the month following the date of occupancy for the proportionate part of the remaining year at the tax rates established for that year, in all taxing jurisdictions located in the county adopting this section as provided in subsection 8 of this section. Newly constructed residential property which has never been occupied shall not be assessed as improved real property until such occupancy or the first day of January of the fourth year following the year in which construction of the improvements was completed. The provisions of this subsection shall apply in those counties including any city not within a county in which the governing body has previously adopted or hereafter adopts the provisions of this subsection.
2. The assessor may consider a property residentially occupied upon personal verification or when any two of the following conditions have been met:
(1) An occupancy permit has been issued for the property;
(2) A deed transferring ownership from one party to another has been filed with the recorder of deeds’ office subsequent to the date of the first permanent utility service;
(3) A utility company providing service in the county has verified a transfer of service for property from one party to another;
(4) The person or persons occupying the newly constructed property has registered a change of address with any local, state or federal governmental office or agency. …
8. Subsections 1 to 7 of this section shall be effective in those counties including any city not within a county in which the governing body of such county elects to adopt a proposal to implement the provisions of subsections 1 to 7 of this section. Such subsections shall become effective in such county on the first day of January of the year following such election.
9. In any county which adopts the provisions of subsections 1 to 7 of this section prior to the first day of June in any year pursuant to subsection 8 of this section, the assessor of such county shall, upon application of the property owner, remove on a pro rata basis from the tax book for the current year any residential real property improvements destroyed by a natural disaster if such property is unoccupied and uninhabitable due to such destruction. … If the assessor, subsequent to such destruction, considers such property occupied as provided in subsection 2 of this section, the assessor shall consider such property new construction and improvements and shall assess such property accordingly as provided in subsection 1 of this section. For the purposes of this section, the term “natural disaster” means any disaster due to natural causes such as tornado, fire, flood, or earthquake.
Section 137.082, the occupancy law, does not impact the land value of the subject property. It only pertains to any improvement on the subject property.
Complainant’s Burden of Proof
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart v. Bateman, 363 S.W.3d 357, 367 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 895 (Mo. banc 1978). “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).
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).
Discrimination
In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of their property on January 1 of the applicable tax years; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction. Koplar v. State Tax Commission, 321 S.W.2d 686, 690, 695 (Mo. 1959). Evidence of value and assessments of a few properties does not prove discrimination. Substantial evidence must show that all other property in the same class, generally, is actually undervalued. State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964). The difference in the assessment ratio of the subject property and the average assessment ratio in the subject county must be shown to be grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986). No other methodology is sufficient to establish discrimination. Cupples-Hesse, supra.
Complainant Fails To Prove Discrimination
Where there is a claim of discrimination based upon a lack of valuation consistency, Complainant has the burden to prove the level of assessment for the subject property in the pertinent tax years. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.
Complainant must then prove the average level of assessment for residential property in Jackson County for the pertinent tax years. This is done by (a) independently determining the market value of a representative sample of residential properties in Jackson County; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.
The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in Jackson County must demonstrate a disparity that is grossly excessive. Savage, supra.
Complainant’s discrimination claim fails because he failed to establish the market value of his property. Without establishing his market value, he cannot establish his assessment ratio. Without establishing his ratio, he cannot establish that he is being assessed at a higher percentage of market value that any other property.
However, even if Complainant had established his market value, his discrimination claim would still fail because he has not demonstrated that a statistically significant number of other residential properties within Jackson County are being assessed at a lower ratio of market value than his property.
Because Complainant has failed to establish the market value of his property and has failed to establish that he is being assessed at a higher percentage of market value than a statistically significant number of other properties in Jackson County, he has failed to establish discrimination.
Discussion
The subject property, from the exterior, appears to be completed. Complainant openly admits that he lives in the subject property, albeit a small portion of the subject property. The BOE determined a TVM for the subject property for tax years 2015, 2016, 2017, 2018, and 2019 at $47,500. The BOE valued the land value of the subject property at $45,000 TVM and the improvement value of the subject property at $2,500 TVM. (Complaint for Review of Assessment BOE attachments).
Although Complainant does not believe the land of the subject property has a TVM of $45,000, Complainant provided no substantial and persuasive evidence to prove a lower value. Additionally, although Complainant asserts that he has only been living in one room of the subject property, Complainant failed to provide any substantial and persuasive evidence that the improvement TVM of the subject property is less that $2,500. Complainant failed to provide substantial and persuasive evidence that the BOE did not consider all factors in setting the TVM of the subject property for 2015, 2016, 2017, 2018, and 2019. For the Hearing Officer to set another TVM for any of the applicable tax years, the Hearing Officer would be required to participate in speculation, conjecture, and surmise. Such would be improper.
ORDER
The TVM of the BOE for the subject property for tax years 2015, 2016, 2017, 2018, and 2019, as set forth below, are AFFIRMED. The value of January 1 of the odd numbered year shall remain the value as of January 1 of the following even numbered year unless there is new construction and/or improvement to the property. Section 137.115.1. The assessed values for the subject property for tax years 2015, 2016, 2017, 2018, and 2019, as set forth below, are affirmed.
| 2015 | 2016 | 2017 | 2018 | 2019 | |
| BOE Total TVM | $47,500 | $47,500 | $47,500 | $47,500 | $47,500 |
| BOE Land Value | $45,000 | $45,000 | $45,000 | $45,000 | $45,000 |
| BOE Improvement Value | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 |
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.
Disputed Taxes
The Collector of Jackson 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.
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 28, 2020.
STATE TAX COMMISSION OF MISSOURI
John J. Treu
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on August 28, 2020, to the taxpayer, county assessor, and county collector.
Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
421 East Dunklin Street
P.O. Box 146
Jefferson City, MO 65102-0146
573-751-2414
Fax 573-751-1341
[1] All statutory citations are to RSMo. 2000, as amended.