STATE TAX COMMISSION OF MISSOURI
| TERRY AND MARYANNE HUGHES | ) | |
| Complainant, | ) | Appeal No. 20-10221 |
| ) | Parcel/Locator No. 18M110102 | |
| ) | ||
| v. | ) | |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| Respondent. | ) |
DECISION AND ORDER
Terry and Maryanne Hughes (Complainants) appeal the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2020, was $344,000. Complainants claim the property is overvalued and propose a value of $298,600. Complainants did not produce substantial and persuasive evidence establishing overvaluation. The BOE’s decision is affirmed.[1]
Complainant, Terry Hughes, appeared pro se. Respondent was represented by counsel, Tim Bowe. The evidentiary hearing was conducted on September 29, 2021, via WebEx.[2]
FINDINGS OF FACT
- Subject Property. The subject property is located at 14 Chaminade Dr., Creve Coeur, St. Louis County, Missouri. The parcel/locator number is 18M110102.
The subject property consists of a 20,384 square foot lot and a 1,064 square foot split level single family home. The home has four bedrooms, two and a half bathrooms, and an attached two car garage. Complainants purchased the subject property approximately 26 years ago.
- Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2020, was $418,300. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2020, was $344,000.
- Complainant’s Evidence. Complainant, Terry Hughes, testified the TVM of the subject property on January 1, 2020, was $298,600. Mr. Hughes’ arguments for the value determination were based on comparable assessments, two easements on the subject property, and the fact that the subject property is in need of multiple repairs.
Complainants submitted the following exhibits:
| Exhibit | Description | Ruling |
| A | Comparable Assessments | Admitted |
| B | Photographs of Sewer line | Admitted |
| C | Photographs of Yard | Admitted |
| D | Photographs of Property Condition – Windows | Admitted |
| E | Photographs of Property Condition -Windows | Admitted |
| F | Photographs of Property Condition | Admitted |
Mr. Hughes testified that his comparable assessments were retrieved from the St. Louis County website and show properties similar in location and size, but different due to their age (the properties are newer) and all were only increased minimally and valued much less than the subject property. (See Exhibit A). Mr. Hughes testified he is not an appraiser nor does he have class training in comparative market analysis. Mr. Hughes testified he did not have any estimates for the cost for repairs for windows or other damage to the property.
- Respondent’s Evidence. Respondent submitted Exhibits 1 and 2, which were admitted into evidence. Respondent presented the testimony of Sharon Kuelker, St Louis County staff appraiser. Exhibit 1 is the BOE decision. Exhibit 2 is the appraisal report concluding the TVM of the subject property on January 1, 2019, was $398,000.
Exhibit 2 utilizes the sales comparison approach to estimate the market value of the subject property from six recent sales of four comparable properties, all within two miles of the property. All six sales were between 2016 and 2020.
The key property data in Exhibit 2 are as follows:
| Subject | 13 Chaminade | 13 Chaminade | 10 Chaminade | 10 Chaminade | 634 Sarawood | 611 Sarawood | |
| Style/Story | Split level | 2 | 2 | 1.5 | 1.5 | Multi-level | Multi-level |
| Square feet | 1,064 | 2,301 | 2,301 | 1,884 | 1,884 | 1,496 | 1,704 |
| Bedrooms | 4 | 4 | 4 | 4 | 4 | 4 | 5 |
| Bathrooms | 3 | 2.5 | 2.5 | 2.5 | 2.5 | 2 | 3 |
| Condition | Good | Fair | Good | Good | Good | Good | Good |
The comparable properties are similar to the subject property with respect to location, age, and condition. The comparable properties differ from the subject property with respect to size and style. Exhibit 2 concludes “In the final opinion of value, most weight was placed on Comps 5 and 6 due to their similarities to the subject and their minimal gross adjustments when compared to Comps 1 thru 4.” (see Exhibit 2 at 6).
- Value. The TVM of the subject property on January 1, 2020, was $344,000.
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.
- 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).
- Complainants Did Not Prove Overvaluation.
Complainants did not establish that the BOE valuation was erroneous. Mr. Hughes testified his home is overvalued due to two easements and the condition of the subject property. Complainants’ Exhibit A, comparable assessments, support the alleged valuation of $296,800. Mr. Hughes testified that in sum, the easements and condition of the property do not support an increase by over 15% and his valuation of $298,600 is accurate based on the comparable assessments from the St. Louis County Assessor’s Website. Although Complainants’ method of finding value does produce a comparison between the properties, comparing assessed values does not provide a true and accurate method for finding the TVM of the subject property. The comparable sales approach is the method used to determine the TVM of the subject 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.” Snider, 156 S.W.3d at 347-48 (internal quotation omitted). Exhibit A’s calculation and subsequent alleged valuation does not account for differences between the comparable assessments and the subject property. Complainants presented no appraisal of the subject property in order to determine a value of the subject property. 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). Complainants’ valuation is based on improper elements and therefore is not substantial and persuasive evidence that the BOE’s valuation is erroneous.
Respondent, although not required to, presented persuasive evidence in support of their valuation. Exhibit 2 and Ms. Kuelker’s testimony that she selected six comparable sales from four comparable properties and adjusted the sales prices based on similarities and differences to the subject property persuasively support the TVM of $344,000 determined by the BOE.
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 2 concludes the market value of the subject property is higher than the value determined by the BOE. Respondent, however, did not advocate a value higher than that determined by the BOE. Exhibit 2 is admissible as evidence for sustaining the value assigned by the BOE. 12 CSR 30-3.075(1).
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2020, was $344,000 with an assessed value of $65,360.
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 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 January, 14, 2022.
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 January 14, 2022, 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] 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] The appeal was initially assigned to Senior Hearing Officer Storck-Elam, who conducted an evidentiary hearing on the record but did not issue a decision and order. Pursuant to Section 138.431.5, “The commission may, prior to the decision being rendered, transfer to another hearing officer the proceedings on an appeal determination before a hearing officer.” Accordingly, this appeal is transferred to Senior Hearing Officer Erica Gage for determination.