State Tax Commission of Missouri
SYLVAN LANDAU,)
)
Complainant,)
)
v.) Appeal Number 09-12407
)
JAKE ZIMMERMAN, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax years 2009 and 2010 is set at $285,000, commercial assessed value of $91,200.Complainant appeared pro se.Respondent appeared by Associate County Counselor, Paula J. Lemerman.
Case decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property 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.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
2.Assessment.The Assessor appraised the property at $359,000, a commercial assessment of $114,880.[1]The Board of Equalization reduced the value to $285,000, assessed value of $91,200.[2]
3.Subject Property.The subject property is located at 2814 Breckenridge Industrial Court, Webster Groves, Missouri.The property is identified by locator number 21K320471.The property consists of .82 of an acre lot improved by a warehouse, with office space.The concrete block warehouse comprises approximately 4,354 square feet. There is a brick veneer office space of approximately 1,104 square feet and another brick veneer office space of approximately 1,968 square feet.[3]The property was damaged in September 2008 by flooding and was not renovated as of January 1, 2009.The property was vacant on January 1, 2009.[4]The gross rental income for 2006, 2007 and 2008 for the property was $76,800 per year.The stabilized net income for the property based upon the 2006, 2007 and 2008 income and expenses $31,640.
4.Procedure on Appeal. Order of December 14, 2010, set Exchange Schedule and Procedure.Complainant filed exhibits, but no written direct testimony.Respondent did not file exhibits or written direct testimony.There was no cross-examination that could be conducted, given that neither party filed direct testimony of any witness.Case was taken under advisement for rendering of a decision based upon Complainant’s exhibits.[5]
5.Complainant’s Evidence.Complainant filed the following exhibits which were received into the record:
|
EXHIBIT |
DESCRIPTION |
|
A |
Summary of Information on Subject Property |
|
B |
Warranted Deed, dated 12/29/05 for purchase of Subject |
|
C |
Plat of subject lot and building |
|
D |
12/29/05 – Closing Statement on Purchase of Subject |
|
E |
Income and Expense Statement for 2006 – 2010 |
|
F |
Estimated Preliminary Renovations Costs – 10/15/09 |
|
G |
20 – exterior and interior photographs of subject building |
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.[6]
There was no evidence the provided a conclusion of value based upon an accepted appraisal methodology.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $150,000[7], or $142,500[8] as proposed.
5.Respondent’s Evidence.Respondent elected to present no evidence on the issue of the true value in money of the subject property.Respondent carried no burden of proof in the appeal.
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.[9]
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.[10]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.[11]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.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[12]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.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.[13]Complainant failed to present any substantial and persuasive evidence to rebut the presumption of correct assessment and establish what a willing buyer and seller would have agreed to as the purchase price of the property under appeal as of January 1, 2009.
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.[14]True value in money is defined in terms of value in exchange and not value in use.[15]It is the fair market value of the subject property on the valuation date.[16]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.[17]
The owner’s opinion of value was not established to represent value under the Standard for Valuation.
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.[18]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.[19] Complainant failed to present a conclusion of value drawn from any of the recognized appraisal approaches.
Complainant Fails To Meet Burden of Proof And Prove Value of $150,000
In order to prevail, Complainant 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.[20]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 Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[21]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[22]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.[23]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[24]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[25]A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[26]
None of the documents submitted by Mr. Landau provide any market data as to what the subject property would have brought in a open market sale on January 1, 2009.The fact that the property was not leased in 2009 and 2010 does not establish that its value is $150,000 or half of the Board value of $285,000.The September 2008 flooding damage is a factor that must be taken into account in the valuation of the property.The estimated costs of renovation are likewise a factor to be considered.However, none of that individually or collectively established fair market value.
The Hearing Officer has nothing but speculation, conjecture and surmise as to what the property in the condition as it existed on January 1, 2009, would have been worth.Complainant’s opinion is not based upon a recognized appraisal methodology.It is not founded upon proper elements and a proper foundation.No probative weight can be given to it.It therefore, fails to rebut the presumption of correct assessment by the Board.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2009 and 2010 is set at $91,200.
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 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. [27]
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.If no Application for Review is filed with the Commission within thirty days of the mailing date set forth in the Certificate of Service, the Collector, 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.
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 April 27, 2011.
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 27thday of April, 2011, to:Sylvan Landau, 16 Goshen Woods, Edwardsville, IL 62025, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Jake Zimmerman, Assessor, County Government Center, 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
[1] Commercial property is assessed at 32% of true value in money (fair market value), Section 137.115.5(1), RSMo
[12] 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)
[13] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[14] 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).
[15] 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).
[16] Hermel, supra.
[17] 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.
[18] 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).
[19] 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).
[20] Hermel, supra.
[21] 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).
[22] See, Cupples-Hesse, supra.
[23] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
[24] Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).
[25] Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).
[26] See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).
[27] Section 138.432, RSMo.