STATE TAX COMMISSION OF MISSOURI
|Complainant,||)||Appeal No. 19-10311|
|v.||)||Parcel No. 12N340106|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI||)|
DECISION AND ORDER
Steve Stranghoener (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the fair market value of the subject property on January 1, 2019, was $523,900. Complainant claims the property is overvalued and proposes a value of $355,279. Complainant did not produce substantial and persuasive evidence establishing overvaluation. The BOE decision, however, is set aside as Respondent introduced substantial and persuasive evidence that the true value in money (TVM) of the subject property as of January 1, 2019, was $450,000. The parties waived their opportunity for an evidentiary hearing and agreed to submit the appeals on the record.² Complainant, pro se, and Respondent, represented by Counsel Monique McNutt, each submitted their respective evidence for appeal on the record.
FINDINGS OF FACT
- Subject Property. The subject property is located at 11426 Old St Charles Rd. in Bridgeton, Missouri. The parcel/locator number is 12N340106.
The subject property consists of a 0.3673 acre lot and a 4,070 square foot single family home. The home has 5 bedrooms and 4 full and 1 half bathrooms. Complainant purchased the subject property in 2011 for $540,000.
- Assessment and Valuation. Respondent assessed the subject property as residential property and determined the appraised value on January 1, 2019, was $523,900. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $523,900.
- Complainant’s Evidence. Complainant’s written direct testimony indicated that the TVM of the subject property on January 1, 2019, was $355,279. Complainant’s testimony indicates that the Respondent’s comparable homes were not proper and submitted his own list of comparable home sales. Complainant testified he is a negotiator and did not testify that he was a licensed appraiser or a person possessing appraisal training. Complainant submitted the following exhibits:
|A||ST LOUIS COUNTY COMPS VS COMPLAINANT’S COMPS AND CRIME STATISTICS||Admitted|
|B||PICTURES OF HOMES NEAR COMPLAINANT’S HOME||Admitted|
|C||BRIDGETON POLICE REPORT REGARDING BREAK-IN AT COMPLAINANT’S HOME ON 11/30/19||Admitted|
|D||ASSESSMENT HISTORY SHOWING ACTUAL VALUES FOR COMPLAINANT’S HOME THAT WERE AGREED TO BY COMPLAINANT AND ST LOUIS COUNTY||Admitted|
|E||RECENT COMPS REFELCTING MARKET CONSISTENCY DURING COVID-19 HIATUS||Admitted|
|F||BRIDGETON NEIGHBORHOOD CRIME UPDATE||Admitted|
|G||KUBAER REGRESSION ANALYSIS USING ACTUAL HISTORY TO PROJECT 2019 VALUE||Admitted|
- Respondent’s Evidence. Respondent submitted two Exhibits, which are admitted into the record. Exhibit 2 is the written direct testimony of appraiser Adam Luesse, who testified to his appraisal report in which he concludes the TVM of the subject property on January 1, 2019 was $450,000. Mr. Luesse has about two years of experience in appraising residential property. Exhibit 1 is a restricted appraisal report prepared by Respondent’s staff appraiser, Adam Luesse. In Exhibit 1, Mr. Luesse utilized both the cost approach and the sales comparison approach to estimate the January 1, 2019, market value of the subject property. Mr. Luesse’s direct testimony concluded the sales comparison approach was the best indicator of value and therefore, the market value was $450,000. Mr. Luesse’s comparable sales approach utilized two similar properties located within one mile of the subject property and four similar properties within approximately three-and-a-half miles of the subject property and all within the Pattonville School District. Mr. Luesse adjusted the sale prices of the comparable properties to account for differences with the subject property. The comparable properties are similar to the subject property with respect to school district, overall usage (single family residential), and size. The comparable properties differ from the subject property with respect to age as most homes were newer or much older.
The key property data in Exhibit 1 are as follows:
|Address||Subject Property||3347 Tuscany Hills Ct.||3254 Bridgeport Pl.||11101 Fairborough Ct||1508 Beckham Ridge Ct||1597 Beckham Ridge Ct||1524 Beckham Ridge Ct|
|Style||2 story||2 story||1.5 story||1 story||2 story||2 story||2 story|
- Value. The TVM of the subject property on January 1, 2019 was $450,000.
CONCLUSIONS OF LAW
- Assessment and Valuation
Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is 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. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).
The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. For this reason, the comparable sales approach is typically used to value residential property. “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 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.
The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012). “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020). 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.
- Complainant’s Burden of Proof
The BOE’s valuation is presumptively correct. Rinehart v. Laclede Gas Co., 607 S.W.3d 220, 227 (Mo. App. W.D. 2020). To prove overvaluation, a taxpayer must rebut the BOE’s presumptively correct valuation and prove the “value that should have been placed on the property.” Snider, 156 S.W.3d at 346. The taxpayer’s evidence must be both “substantial and persuasive.” Id. “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage, 722 S.W.2d at 77 (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”). 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. 1980).
- Complainant Did Not Prove Overvaluation. Complainant estimated the subject property should have been $355,279 due to location, run-down homes in his neighborhood, and rising crime rates. Most of Complainant’s Exhibits (A, B, C, E, F and G) focus on these arguments. This evidence is unpersuasive because it is not backed by any market analysis or proper appraisal. See Cohen, 251 S.W.3d at 349 (holding a landowner’s opinion of value lacks probative value when there is “no other evidence as to what he based his opinion on or how he arrived at his opinion of [value]”). There was no appraisal of the subject property submitted by Complainant. Complainant did submit evidence of recent home sales within a 5 miles radius; however, overall the sales data includes 8 homes, 7 of which are smaller in square footage and although the sales price is listed and is relevant evidence, those prices were not adjusted to become comparable to the subject property. One of Complainant’s comparable sales was also listed by Mr. Luesse in Exhibit 1; however, the data submitted by Complainant for that comparable home was not adjusted to correspond with the subject property. Therefore, all of the comparable home data and analysis submitted in Complainants Exhibit(s) is both speculative and incomplete (see Exhibits A, B, E and G).
Exhibit D is unpersuasive of TVM for the subject property as it is simply a listing of prior years’ agreements between Complainant and the Assessor. It does not take into account the current market or actual evidence of value; rather it is a list of the property owner’s opinion on past value, which is generally held to be not persuasive and substantial evidence of TVM. See Shelby Cty. R-IV Sch. Dist. v. Herman, 392 S.W.2d 609, 613 (Mo. 1965) (while a property owner’s opinion of value is generally admissible, the opinion “is without probative value where it is shown to have been based upon improper elements or an improper foundation”).
Although Complainant’s evidence is unpersuasive, Respondent’s Exhibit 1 is substantial and persuasive evidence showing the TVM of the subject property on January 1, 2019, was $450,000. Exhibit 1 utilizes the comparable sales approach to estimate that the value of the subject property on January 1, 2019, was $450,000. (Ex. 1 at 2). Exhibit 1 demonstrates there is an active market for six similar single-family homes in the subject property’s neighborhood and there is sufficient data to make a comparative analysis. See Snider, 156 S.W.3d at 348 (noting the comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis”). Mr. Luesse credibly testified in his written direct testimony the comparable sales approach was the best valuation approach for the subject property. The comparable sales approach utilized in Exhibit 1 is an appropriate valuation method and constitutes substantial and persuasive evidence to value the subject property at $450,000. See Snider, 156 S.W.3d at 341, 347.
CONCLUSION AND ORDER
The BOE decision is set aside. The TVM of the subject property as of January 1, 2019, was $450,000.
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 for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person 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.
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.
SO ORDERED May 7, 2021.
STATE TAX COMMISSION OF MISSOURI
Erica M Gage
Senior Hearing Officer
State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on May 7th, 2021, to:
Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
 Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal. Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
² Section 138.431.5 provides the “hearing officer, after affording the parties reasonable opportunity for fair hearing, 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.”