STATE TAX COMMISSION OF MISSOURI
| TERRY AND JOYCE SLAYTON | ) | Appeal No. 19-30339 |
| ) | Parcel/locator No. 14-720-08-02-00-0-00-000 | |
| Complainant(s), | ) | |
| ) | ||
| v. | ) | |
| ) | ||
| GAIL MCCANN-BEATTY, ASSESSOR, | ) | |
| JACKSON COUNTY MISSOURI, | ) | |
| Respondent. | ) |
DECISION AND ORDER
Terry and Joyce Slayton (Complainants) appeals the Jackson County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2019, was $24,000. [1] Complainant claims the property is overvalued and proposes a value of $0. Complainant did not produce substantial and persuasive evidence establishing overvaluation. The BOE’s decision is affirmed.[2]
Complainant appeared pro se. Respondent was represented by counsel Elizabeth Judy. The evidentiary hearing was conducted on September 22, 2021, via WebEx.
FINDINGS OF FACT
- Subject Property. The subject property is located at 10437 E Chicago Ave. in Jackson County, Missouri. The parcel/locator number is 14-720-08-02-00-0-00-000.
The subject property consists of a 125 foot by 160 foot lot with a 1,365 square foot single family home and a detached large sized shed. The home has two bedrooms and one bathroom.
- Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $29,013. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $24,000.
- Complainant’s Evidence. Complainant testified he could not determine the TVM of the subject property on January 1, 2019. Complainant submitted his Exhibit A, a collection of letters and copies of reports regarding the soil of the subject property.
- Respondent’s Evidence. Respondent submitted Exhibit 1 and presented testimony from staff appraiser Michael Hall. Exhibit 1 is the appraisal report determining the TVM of the subject property on January 1, 2019 was $30,000.
Exhibit 1 utilizes the sales comparison approach to estimate the market value of the subject property from recent sales of three comparable properties. The comparable properties in Exhibit 1 are similar to the subject property with respect to age, size, and location. The comparable properties differ from the subject property with respect to condition, as the subject property is in poor condition and the other homes are in fair to good condition.
- Value. The TVM of the subject property on January 1, 2019 was $24,000.
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.
- Evidence
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.
Agencies shall take official notice of all matters of which the courts take judicial notice. Section 536.070(6). Courts will take judicial notice of their own records in the same cases. State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898).
In addition, courts may take judicial notice of records in earlier cases when justice requires or when it is necessary for a full understanding of the instant appeal. Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929); State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956).
- 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 testified that the property is in disrepair and needs a new roof, paint and interior remodel. Complainant testified that in approximately 1999, a judge stated in court that he considered the property value to be $0 due to the soil being contaminated. Complainant testified that the letters and reports included in his Exhibit A contain the specific facts of the soil contamination. Complainant’s Exhibit A did not contain any evidence regarding the property’s value or the judge’s determinations regarding the value. When asked, Complainant could not attest to a specific valuation for the property but testified that he felt that property was worth between $0 and $13,000 because the judge’s statements were made in approximately 1999 and the home was in worse condition now, no improvements to the subject property have been completed since then, and the condition of the soil would hinder the sales price were it disclosed to a potential buyer.
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.” Shelby Cty. R-IV Sch. Dist. v. Herman, 392 S.W.2d 609, 613 (Mo. 1965); see also Cohen v. Bushmeyer, 251 S.W.3d 345, 349 (Mo. App. W.D. 2008) (noting a property owner’s opinion of value loses probative value when it rests on an improper foundation). Despite Complainants arguments, he failed to establish a value for the property in his testimony or Exhibit A. Complainant’s arguments regarding the soil affecting the property’s value are not persuasive. Complainant testified he has not recently purchased the property nor listed it for sale, therefore despite his concerns regarding the soil, he presented no evidence of whether or not the soil’s condition would actually affect the subject property’s marketability. Complainant’s arguments regarding the soil are conclusory, speculative, and lacking proper foundation. Complainant did not offer any appraisal of the property as evidence of value; rather he testified he just thought the property was in too poor of condition to be worth the BOE’s valuation. However, the standard to overturn the BOE’s presumptively correct valuation must be supported with evidence of more than the owner’s opinion alone. See Shelby at 613. In sum, Complainant failed to establish substantial and persuasive evidence of value for his property as of January 1, 2019.
Respondent’s evidence found an active market of comparable homes. Although this was not required, Respondent’s Exhibit 1 found three sales in 2018 of similar homes in the range of $28,500 to $49,900. Once those sales were adjusted for similarities to and differences with the subject property, Exhibit 1 and the testimony of Mr. Hall support a January 1, 2019, valuation of $30,000.
In an STC hearing, Respondent “shall not advocate nor present evidence advocating a valuation higher than that value finally determined by the assessor or the value determined by the BOE, whichever is higher, for that assessment period.” Section 138.060.1. If Respondent introduces “evidence indicating a higher value than the value finally determined by the assessor or the value determined by the board of equalization … such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.” 12 CSR 30-3.075(1).
Respondent’s Exhibit 1 concludes the market value of the subject property is higher than the value determined by Respondent or the BOE. Respondent, however, did not advocate a value higher than that determined by the BOE. Exhibit 1 is admissible as evidence for sustaining the value assigned by the BOE. 12 CSR 30-3.075(1). Respondent’s evidence establishes that the BOE’s value of $24,000 should be upheld.
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2019, was $24,000. [3]
Application for Review
A party may file with the Commission an application for review of this decision within 30 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.
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.
SO ORDERED October, 22, 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 October 22, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Elaina Mejia
Legal Coordinator
[1] Although at the Evidentiary Hearing, Respondent testified the BOE’s decision agreed with the Assessor, the record shows the BOE set the subject property value at $24,000. Section 536.070(6).
[2] 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.