State Tax Commission of Missouri
| THE EMPIRE DISTRICT ELECTRIC COMPANY, | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| ) | Appeal No. 13-89566 | |
| ) | ||
| CHUCK PENNEL, ASSESSOR | ) | |
| TANEY COUNTY, MISSOURI | ) | |
| ) | ||
| Respondent. | ) | |
| ) |
ORDER NUNC PRO TUNC
Order and Decision dated August 27, 2104, is amended nunc pro tunc as follows:
The language:
“5. The STC reduced Empire’s 2013 Assessment by $1,532.090.00, the amount of the Taney County Assessor’s assessment of said property before June 25, 3014.
6. On or about June 25, 3013, James Strahan, then the Assessor of Taney County, Missouri, sent Empire a Taney County Notice of Change in Assessed Value of Real Property (hereinafter “Change in Assessment”). The proposed Change in Assessment increased the commercial value of the Ozark Beach Dam property by $432,000.00; from $1,531,090.00 to $1,963,090.00.”
is stricken and the following is inserted thereof:
“5. The STC reduced Empire’s 2013 Assessment by $1,532.090.00, the amount of the Taney County Assessor’s assessment of said property before June 25, 2013.
6. On or about June 25, 2013, James Strahan, then the Assessor of Taney County, Missouri, sent Empire a Taney County Notice of Change in Assessed Value of Real Property (hereinafter “Change in Assessment”). The proposed Change in Assessment increased the commercial value of the Ozark Beach Dam property by $432,000.00; from $1,531,090.00 to $1,963,090.00.”
In all other respects said Order is affirmed as issued.
SO ORDERED September 3, 2014
STATE TAX COMMISSION OF MISSOURI
Maureen Monaghan
Hearing Officer
DECISION AND ORDER
Complainant appeals the decision of James E. Strahan, previous Assessor of Taney County, raising value for Complainant’s real property from $1,532,090 to $1,963,090 for tax year 2013. The property is identified as parcel number 09-3.0-08-001-010-024.002, also identified as tax code 3CCX, and more commonly known as Ozark Beach Dam.
Joint Stipulation of Facts
On April 21, 2014, the parties submitted the following joint stipulation of facts:
1. Empire, as a public utility is required by Section 153.030.3 RSMo, on or before April 15 of each year, to “furnish the state tax commission and county clerks a report, duly subscribed and sworn to be such authorized officer, which is like in nature and purpose to the reports required of railroads under chapter 151 showing the full amount of all real and tangible personal property owned, used, leased, or otherwise controlled by each such company on January first of the year in which the report is due” (hereinafter “Annual Report”).
2. Empire’s 2013 Annual Report included the values of its Taney County property in the amounts assessed as of April 15, 2013 by James Strahan, then the Assessor of Taney County, Missouri.
3. The specific parcel that is subject to Empire’s Complaint for Review of Assessment is property number 09-3.0-08-001-010-024.002, described as: OZARK BEACH DAM BETWEEN LTS 4 TH AND 13 OF FRL SEC, (hereinafter “Ozark Beach Dam”) and had a Taney County assessed value of $1,531,090.00 on April 15, 2013.
4. $1,531,090.00 was included by Empire on its April 15, 2013 report to the STC as the assessed value of the Ozark Beach Dam property for purposes of calculating each Missouri county’s allocable share of the STC Assessment net of “local property” assessment/taxation.
5. The STC reduced Empire’s 2013 Assessment by $1,532.090.00, the amount of the Taney County Assessor’s assessment of said property before June 25, 3014.
6. On or about June 25, 3013, James Strahan, then the Assessor of Taney County, Missouri, sent Empire a Taney County Notice of Change in Assessed Value of Real Property (hereinafter “Change in Assessment”). The proposed Change in Assessment increased the commercial value of the Ozark Beach Dam property by $432,000.00; from $1,531,090.00 to $1,963,090.00.
7. On or about June 28, 2013, Empire informed Mr. Strahan of its objection to the Change in Assessment.
8. The proposed Change in Assessment was made more than two (2) months after Empire was required by Mo. Rev. Stat. 153.030.3 to certify its local property values to the STC.
9. The proposed $432,000.00 increase in assessment would increase Empire’s 2013 Taney County real property taxes, but there is no known corresponding $432,000,000 adjustment (reduction for “local property”) to Empire’s 2013 STC Assessment.
10. Empire contends that the proposed Change in Assessment would result in Empire being taxed on the increase of $432,000 over its 2013 Assessment.
Exhibits
By Order dated March 13, 2014, Chief Counsel Maureen Monaghan ordered the parties to submit Exhibits and Written Direct Testimony by June 30, 2014. Neither party submitted an appraisal report to substantiate their opinion of value for the property.
Complainant did submit its Written Direct Testimony of Mr. Rob Sager, Comptroller of Complainant, discussing the steps taken by Complainant in conjunction with this appeal. However, Mr. Sager is not an appraiser and is not shown to be qualified to determine the market value of the subject dam. Additionally, his argument that increasing the value of the dam would result in double taxation is not based upon any identifiable market evidence.
CONCLUSIONS OF LAW
Property of Utilities Taxed at Market Value
153.030. 1. . . .All property, real and tangible personal, owned, used, leased or otherwise controlled by telegraph, telephone, electric power and light companies, electric transmission lines, pipeline companies and express companies shall be subject to taxation for state, county, municipal and other local purposes to the same extent as the property of private persons.
Local and Distributable Property Defined
153.034. 1. The term “distributable property” of an electric company shall include all the real or tangible personal property which is used directly in the generation and distribution of electric power, but not property used as a collateral facility nor property held for purposes other than generation and distribution of electricity. Such distributable property includes, but is not limited to:
(1) Boiler plant equipment, turbogenerator units and generators;
(2) Station equipment;
(3) Towers, fixtures, poles, conductors, conduit transformers, services and meters;
(4) Substation equipment and fences;
(5) Rights-of-way;
(6) Reactor, reactor plant equipment, and cooling towers;
(7) Communication equipment used for control of generation and distribution of power;
(8) Land associated with such distributable property.
2. The term “local property” of an electric company shall include all real and tangible personal property owned, used, leased or otherwise controlled by the electric company not used directly in the generation and distribution of power and not defined in subsection 1 of this section as distributable property. Such local property includes, but is not limited to:
(1) Motor vehicles;
(2) Construction work in progress;
(3) Materials and supplies;
(4) Office furniture, office equipment, and office fixtures;
(5) Coal piles and nuclear fuel;
(6) Land held for future use;
(7) Workshops, warehouses, office buildings and generating plant structures; (8) Communication equipment not used for control of generation and distribution of power;
(9) Roads, railroads, and bridges;
(10) Reservoirs, dams, and waterways;
(11) Land associated with other locally assessed property and all generating plant land.
Procedure for Assessing Property of Utilities
(Procedure Same as for Assessing Railroad Property)
153.030.2. All taxes levied thereon shall be levied and collected in the manner as is now or may hereafter be provided by law for the taxation of railroad property in this state, and county commissions, county boards of equalization and the state tax commission are hereby required to perform the same duties and are given the same powers, including punitive powers, in assessing, equalizing and adjusting the taxes on the property set forth in this section as the county commissions and boards of equalization and state tax commission have or may hereafter be empowered with, in assessing, equalizing, and adjusting the taxes on railroad property; and an authorized officer of any such bridge, telegraph, telephone, electric power and light companies, electric transmission lines, pipeline companies, or express company or the owner of any such toll bridge, is hereby required to render reports of the property of such bridge, telegraph, telephone, electric power and light companies, electric transmission lines, pipeline companies, or express companies in like manner as the authorized officer of the railroad company is now or may hereafter be required to render for the taxation of railroad property.
I. Utility Declares Property
153.030.3. On or before the fifteenth day of April in the year 1946 and each year thereafter an authorized officer of each such company shall furnish the state tax commission and county clerks a report, duly subscribed and sworn to by such authorized officer, which is like in nature and purpose to the reports required of railroads under chapter 151 showing the full amount of all real and tangible personal property owned, used, leased or otherwise controlled by each such company on January first of the year in which the report is due.
II. Assessor Certifies Local Property
151.110. 1. For the purpose of carrying out the provisions of section 151.100, an authorized officer of every such railroad company shall, in addition to the report required to be furnished to the county clerk, as described in section 151.030, no later than April first in each year, furnish to each county assessor in this state, wherever any local property owned or controlled by such company may be located, a separate report, under oath for the benefit of county and other local assessors, specifically describing all lands by county tax map parcel number, situated in such county, and not included in their returns to the state tax commission and county clerks, under sections 151.020 and 151.030, owned or controlled by such company, on the first day of January in each year, and the true value in money thereof.
2. Each county assessor in this state shall certify a copy of the report required by subsection 1 of this section and a copy of assessments thereon to the county clerk, the company and the state tax commission no later than April twentieth in each year.
See also 12 CSR 30-2.010.
III. Company Certifies Local Property of all Counties
151.110.3. An authorized officer of every such railroad company shall, in addition to the reports required to be furnished to the county clerk as described in section 151.030 and subsection 1 of this section, furnish to the state tax commission a list by county of the true value in money of all local property as derived by the county assessor in each county no later than May first in each year.
IV. County Commission Certifies Distributable Property
151.040. At the next term of the county commission after such report is received, the clerk shall lay it before the county commission, and the county commission shall examine the report and determine the correctness thereof as to the description of the distributable property and if found correct, the county commission shall cause the clerk thereof to certify to the correctness of the report, under the seal of the county commission, and forward the certificate to the state tax commission on or before the fifteenth day of May next thereafter; if found in the opinion of the county commission to be incorrect, the county commission shall proceed immediately to ascertain what distributable property has been omitted, and shall return a description thereof to the state tax commission indicating the number of miles of road in each taxing jurisdiction cited in section 151.020 on or before the fifteenth day of May next; and if the county commission shall fail to make or cause to be made the certificate herein required, and in the time specified, the clerk shall make the certificate and a certificate that the county commission has so failed.
V. State Tax Commission has Power of Original Assessment over Distributable Property
138.420. 1. The state tax commission shall have the exclusive power of original assessment of the distributable property of railroads, railroad cars, rolling stock, street railroads, bridges, telegraph, telephone, electric power and light companies, electric transmission lines, pipeline companies, express companies, and other similar public utility corporations, companies and firms, and of the aircraft of airlines companies in a manner not inconsistent with chapter 155.
2. After original assessments of the state tax commission have been completed, each corporation, person or public utility interested therein shall be promptly notified of the action of the state tax commission and shall have the right to apply for a rehearing. The state tax commission shall grant and hold such rehearing and fix the date thereof.
3. If, after such rehearing and a consideration of the facts, the state tax commission shall be of the opinion that the original decision or any part thereof should be changed, the state tax commission may change or modify the same and such assessed valuations as are finally determined shall be certified to the clerks of the several county commissions and to the assessor in St. Louis City at the same time that valuations of real and tangible personal property are returned.
4. The state tax commission shall also have all power of original assessment of real and tangible personal property in the possession of any assessing officer on January first.
VI. State Tax Commission Determines Value of Distributable Property
151.060. 1. The state tax commission shall assess, adjust and equalize the aggregate valuation of the distributable property of each one of the railroad companies in this state specified in section 151.020. For the purpose of estimating the true value in money of the distributable property of a railroad company, the state tax commission may take into consideration the reports filed under section 151.020, the reports, statements or returns of the company filed in the office of any board, office, or commission of this state, or any county thereof, and such other evidence of any kind that is obtainable bearing thereon. However, no report, statement or return shall be conclusive upon the state tax commission in estimating the true value in money of the operating property of a railroad company.
2. The state tax commission shall have power to summon witnesses by process issued to any officer authorized to serve subpoenas, and shall have the power of a circuit court to compel the attendance of such witnesses, and to compel them to testify; they shall have the power, upon their knowledge, or such information as they can obtain, to increase or reduce the aggregate valuation of the distributable property of any railroad company included in the reports and returns made by the railroad companies and the clerks of the county commissions, and shall assess, adjust and equalize any other distributable property owned, used, leased or otherwise controlled by such railroad companies, or any railroad company’s distributable property upon which no returns have been made, which may be otherwise known to them, as they deem just and right. In the event the state tax commission determines that certain distributable property has been omitted from the railroad’s report under section 151.020, the state tax commission shall describe the omitted distributable property in its records and shall assess the omitted distributable property at double its true value in money unless the state tax commission for good cause shown, waives this penalty.
3. In assessing, adjusting and equalizing any distributable railroad property for any year or years the state tax commission may arrive at its finding, conclusion and judgment, upon its knowledge, or such information as may be before it, and shall not be governed in its findings, conclusions and judgment by the testimony which may be adduced, further than to give to it such weight as the state tax commission may think it is entitled to, except that when any railroad shall extend beyond the limits of this state and into another state in which a tax is levied and paid on any distributable property of such railroad, then the state tax commission shall assess, equalize and adjust only such proportion of the total value of all the distributable property of such railroad company as may be reasonably allocated to this state. To accomplish this end, the state tax commission may require information in its form reports under subsection 4 of section 151.020 which is necessary to properly assess and allocate such property.
4. The state tax commission shall assess the value of all bridges, approaches and appurtenances thereto acquired by any railroad company or its wholly owned subsidiary in this state by trade with a city not within a county at no greater value than the value of the distributable property traded, as established for the year immediately preceding the calendar year of the trade. Such assessment shall not increase, but may decrease, during ten years following the acquisition of such bridges, approaches and appurtenances thereto by the railroad or its wholly owned subsidiary from the city not within a county.
VII. Commission Uses Unit Value to Apportion
Under 12 CSR 30-2.016 electric companies are valued using an allocated unit value based upon the aggregate statement of taxable property. The value is calculated as follows:
(B) Electric Companies. The valuation allocated to Missouri should be based on the following factors and percentage weights:
1. The ratios of total gross plant in service, total net plant in service, total operating revenues and net operating income within the state to the aggregate amounts of these factors of the electric company. These factors are
assigned the following percentage weights:
Factor Weight
A. Gross plant in service 30%;
B. Net plant in service 30%;
C. Total operating revenues 20%; and
D. Net operating income 20%;
12 CSR 30-2.016. The unit valuation methodology is a widely accepted means of valuing regulated utilities.
VIII. State Tax Commission Apportions to Taxing Districts
151.080. The state tax commission shall apportion the aggregate value of all distributable property herein specified, which is owned, used, leased or otherwise controlled by each railroad company, to each county, municipal township, city or incorporated town, special road districts, library districts, school districts which levy taxes for library purposes pursuant to section 137.030, hospital districts, nursing home districts, ambulance districts, metropolitan zoological park and museum district established pursuant to section 184.350, public water supply, fire protection and sewer districts or subdivisions, except other school districts, in which the road is located, according to the ratio which the number of miles of the road completed in the county, municipal township, city or incorporated town, special road district, library districts, school districts which levy taxes for library purposes pursuant to section 137.030, hospital districts, nursing home districts, ambulance districts, metropolitan zoological park and museum district established pursuant to section 184.350, public water supply, fire protection and sewer districts or subdivisions, except other school districts, in which the road is located shall bear to the whole length of the road in this state; provided, that in any case where a company whose line or road is liable to taxation shall have been or may become consolidated into another corporation, entitled by its charter or otherwise to exemption from county or other taxation, that portion of the road which is liable to taxation, as aforesaid, shall be assessed separately, and the value thereof apportioned to the counties, municipal townships, cities or incorporated towns, special road districts, library districts, school districts which levy taxes for library purposes pursuant to section 137.030, hospital districts, nursing home districts, ambulance districts, metropolitan zoological park and museum district established pursuant to section 184.350, public water supply, fire protection and sewer districts or subdivisions, except other school districts, in which it is located; and an authorized officer of each such railroad company shall, in the annual reports rendered to the state tax commission, as provided in section 151.020, include statement of the length of the road within school districts which levy taxes for library purposes pursuant to section 137.030, and library districts; provided, further, that in no event shall any school district levy school taxes, taxes for the erection of public buildings, or for other purposes except library purposes on the property herein specified, in any manner other than that provided for in section 151.150.
X. County uses State Tax Commission Value Apportionment
151.140. The county commission, upon the receipt from the state tax commission of the returns of the county assessor and the certificate of cities, towns, villages, special road districts, library districts, school districts which levy taxes for library purposes pursuant to section 137.030, hospital districts, nursing home districts, ambulance districts, metropolitan zoological park and museum district established pursuant to section 184.350, public water supply districts, fire protection districts and sewer districts or subdivisions, except other school districts, made under section 151.120 shall, at the regular term of the county commission, if in session at the time, if not, at an adjourned term or a special term of the county commission called for that purpose, ascertain and levy the taxes for state, county, municipal township, city, incorporated town and village, school, special road, library, hospital, nursing home, ambulance, zoological park and museum, public water supply, fire protection and sewer purposes and for capital projects purposes and for other purposes on the railroad and the property thereof, in such county, municipal township, city, incorporated town or village, special road district, library district, school district which levies taxes for library purposes pursuant to section 137.030, hospital district, nursing home district, ambulance district, metropolitan zoological park and museum district established pursuant to section 184.350, public water supply district, fire protection district, sewer district or subdivision, except other school districts, at the same rate as may be levied on other property, except that the rate for school purposes and for capital projects purposes, and for other purposes, shall be ascertained as described in section 151.150, and shall make an entry thereof on the records of the county commission; and in case the county commission has failed or omitted, or may hereafter fail or omit, from any cause whatever, to levy the taxes or any portion of the taxes for any year or years, or in case the taxes or any portion of taxes for any year or years shall be illegally or erroneously levied, then the county commission, at the time of making the regular levy upon railroad property as herein provided, shall, in addition thereto, ascertain and levy the taxes for state, county, municipal township, city, incorporated town or village, school, special road, library, hospital, nursing home, ambulance, zoological park and museum, public water supply, fire protection and sewer purposes, and for capital projects purposes and for other purposes, on the railroad and the property thereof in such county, municipal township, city, incorporated town or village, special road district, library district, school district which levies taxes for library purposes pursuant to section 137.030, hospital district, nursing home district, ambulance district, metropolitan zoological park and museum district established pursuant to section 184.350, public water supply district, fire protection district and sewer district or subdivision, which may have been or may hereafter be omitted or illegally or erroneously levied upon the valuation of the railroad and the property thereof, as determined by the state tax commission for such year or years, at the same rates that were levied upon other property for the year or years in which the taxes were omitted or illegally or erroneously levied; provided that in no case shall the levy exceed the constitutional limits; and which taxes, when so levied, shall become due and payable, delinquent and subject to penalty as other railroad taxes now are, and shall be recoverable as provided in section 151.230.
DISCUSSION
There can be no question that property owned by electric companies must be valued and assessed at its fair market value under Section 153.030.1 RSMo. However, it is also clear from the above law, that the assessor cannot wait until late June of the tax year to begin thinking about the value of local property of utilities. Under Section 151.110 RSMo., the assessor must certify his values by April 20 of the tax year. The entire assessment process, including review by the county commission and utility appeal rights to the Tax Commission, hinges on meeting the statutorily established deadlines.
To determine certification values, the Tax Commission first determines the amount of aggregate utility value that can be allocated to Missouri. It then deducts the locally assessed property to ascertain the “distributable” property value; and allocates that “distributable” value to each taxing district. The various counties use this allocation to establish taxes due to each political subdivision. Taxes are due on or before December 31. These certified figures are also given to the Department of Revenue and to the Department of Education.
In this instance, the Tax Commission did its initial county by county and taxing district by taxing district certification for Empire Electric on June 27, 2013 — just two days after Mr. Strahan’s raise order. Mr. Strahan did not notify the Tax Commission of this raise order. The Tax Commission issued an amended certification on September 24, 2013 — more than three months prior to the time the Tax Commission was notified of Mr. Strahan’s actions through a taxpayer appeal filed December 31, 2013.
Although the statutory language has no penalty attached for failure to act in a timely manner, in this instance it is imperative that the assessor make an early determination of value of locally assessed property. In B & D Investments v. Schneider, 646 SW 2d 759 (Mo. Banc 1983) dealing with untimely compliance with payment under protest statutes, our Supreme Court stated:
The essential purposes of such statutes are to furnish an adequate and sufficient remedy to the taxpayer, and at the same time to provide an expeditious method by which the various branches of government affected can obtain the revenue necessary for their maintenance without protracted delay . . .
In B & D Investments, the taxpayer was precluded from maintaining an action for recovery of protested taxes because of failure to timely notify the collector of its protest. The same reasoning applies here. The Tax Commission cannot correctly perform its statutory duties and the utility and the various political subdivisions are adversely affected by delays in determining the value of locally assessed property.
While the assessor always has the right to challenge the utility’s statement of value, such challenge must be made in a way which allows the Commission to deal with the challenge prior to certification, as contemplated by Section 138.420 RSMo.
ORDER
The assessed valuation for the subject property as determined by the Assessor for Taney County for the subject tax day is SET ASIDE.
The market value for the subject property for tax year 2013 is set at $1,532,090.
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, 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, RSMo
Disputed Taxes
The Collector of Taney 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.
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 this 27th day of August, 2014.
STATE TAX COMMISSION OF MISSOURI
Luann Johnson
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 27th day of August 2014 to: Sharrock Dermott, P.O. Box 127, Joplin, Mo 64802, Attorney for Complainant; William McCullah, P.O. Box 370, Forsyth, MO 65653, Attorney for Respondent; Chuck Pennel, Taney County Assessor, P.O. Box 612 Forsyth, MO 65653; Donna Neeley Taney County Clerk P.O. Box 156 Forsyth, MO 65653, Sheila Wyatt, Taney County Collector, P.O. Box 278 Forsyth, MO 65653.
Jacklyn Wood
Legal Coordinator