State Tax Commission of Missouri
THOMAS SCHAEFER,)
)
Complainant,)
)
v.) Appeal No.10-10037
)
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 SET ASIDE.True value in money for the subject property for tax year 2010 is set at $500,000, residential assessed value of $95,000.Complainant appeared pro se.Respondent appeared by Associate County Counselor, Paula J. Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine (1) the true value in money for the subject property on January 1, 2010; and (2) whether there was an intentional plan by the assessing officials to assess the property under appeal at a ratio greater than 19% of its true value in money, or a ratio greater than the average residential assessment for property in St. Louis
County for the 2009-10 assessment cycle.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.A hearing was conducted on July 26, 2011, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property at $535,700, a residential assessment of $101,780.[1]The Board of Equalization reduced the value to $520,000, a residential assessment of $98,800.
3.Subject Property.The subject property is located at 375 Champion Way Dr., Ballwin, Missouri.The property is identified by locator number 21R210779.The property is further described in Exhibit A and Exhibit 1.
4.Complainant’s Evidence.Complainant testified in his own behalf.Two exhibits were received into evidence on behalf of Complainant.These exhibits consisted of the following:
Exhibit A – a spreadsheet prepared by Mr. Schaefer comparing the subject to three other properties in The Manors of Hill Trail (subject development) and three properties used as comparables by the Assessor in the original valuation.
Exhibit B – copy of Sale Contract on purchase of subject, dated 4/25/09, $500,000 purchase price, Settlement Statement, dated 6/19/09, sale price $500,000, and Individual Condominium Unit Appraisal Report on subject, dated 6/2/09, fair market value of $500,000.
There was evidence of new construction and improvement from January 1, 2009, to January 1, 2010,[2] therefore the assessed value for 2010 is established as if the subject property existed on January 1, 2009 as it was constructed on January 1, 2010.[3]
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 $385,500.[4]See, Complainant Fails To Prove Value of $385,500, infra.
Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the claim of discrimination.See, Complainant Fails To Prove Discrimination, infra.
5.Respondent’s Evidence.Respondent presented the testimony of Sarah Curran, Senior Residential Real Estate Appraiser for the St. Louis County Assessor.The following Exhibits were received into evidence on behalf of Respondent.
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EXHIBIT |
DESCRIPTION |
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1 |
Real Estate Agent Detail Report on Subject |
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2 |
Certificate of Value dated 6/19/09 – Sale of Subject $500,000 |
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3 |
Property Record Card on Subject – 2009 |
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4 |
Property Record Card on Subject – 2010 |
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5 |
Certified Copy – General Warranty Deed – dated 6/18/09 |
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6 |
Certified Copy – Deed of Trust – Subject – $420,000 – dated 6/19/09 |
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7 |
Assessor’s Locator Information – Subject |
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8 |
Field Inspection Reports on Status of subject development |
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9 |
Change Notice, dated 6/30/10 – Subject – Appraised Value $535,700 |
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10 |
Internet Property Record Card – Subject – 2009 |
Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2010, to be $500,000.
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.[5]
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.[6]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.[7]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.[8]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, or the Respondent, when advocating a value different than that established by the Board, 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.[9]Complainant presented evidence to rebut the presumption of correct assessment by the Board, but not to establish a fair market value of $383,500.Respondent presented evidence to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2010, to be $500,000.
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.[10]True value in money is defined in terms of value in exchange and not value in use.[11]It is the fair market value of the subject property on the valuation date.[12]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.[13]
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.[14]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, as well as the actual sales price of the property under appeal.[15]
Complainant Fails To Prove Value of $383,500
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.[16]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.”[17]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[18]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.[19]
The owner of property is generally held competent to testify to its reasonable market value.[20]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[21]The taxpayer’s opinion of value was the value set by the Assessor for the 2009 assessment when the property was being completed and the value was under a proration since it was not occupied until after the June, 2009 sale.This is not a proper foundation for an opinion of value, since under the provisions of Section 137.115.1, RSMo, the property for tax year 2010, must be valued as if it had been completed on January 1, 2009.No probative weight can be given to the owner’s opinion of value of $385,500.
Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.The actual sale price is a method that may be considered for estimating true value.[22] In this instance, the sale of the subject just six months after the assessment date of January 1, 2009, provides substantial and persuasive evidence to establish the true value in money for the property.The actual sale rebuts the owner’s opinion of $385,500 and established to fair market value of the property as of January 1, 2009, (in its completed condition) to have been $500,000.
Complainant Fails To Prove Discrimination
Where there is a claim of discrimination based upon a lack of valuation consistency, Complainant has the burden to prove the level of assessment for the subject property in 2009. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.
Complainant must then prove the average level of assessment for residential property in St. Louis County for 2009-10.This is done by (a) independently determining the market value of a representative sample of residential properties in St. Louis County; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.
The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in St. LouisCountymust demonstrate a disparity that is grossly excessive.[23]The actual assessment level of the subject property under the assessed value of $98,800 as established by the Board, based upon the fair market value of $500,000 as herein determined, was .1976.[24]The statutory assessment level of 19% on $500,000, produces an assessed value of $95,000.This means that under the $520,000 Board value, Complainant’s property was only over assessed by $3,800 or 4%.This is a de minimus variance.It is not a grossly excessive disparity.In the absence of evidence to establish the average residential assessment level for the 2009-10 assessment in St. Louis County, the remedy is to assess the subject property at 19% of its true value in money of $500,000
Complainant failed to demonstrate that a statistically significant number of other residential properties within St. Louis County are being assessed at a lower ratio of market value than the subject property.Complainants’ claim of discrimination is based upon six properties which sold for prices in excess of their appraised value.This does not constitute a statistically representative sample to establish the 2009-10 residential assessment ratio in St. Louis County.
Because Complainant failed to establish that the subject property was being assessed at a higher percentage of market value than a statistically significant number of other properties in St. Louis County, he failed to establish the claim of discrimination.
Respondent Proves Value
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.[25]Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2010, to be $500,000 for the subject.The evidence of the actual sale of the property in June 2009 met the required burden of proof.
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 SET ASIDE.
The assessed value for the subject property for tax year 2010 is set at $95,000.
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 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. [26]
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 August 10, 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 10thday of August, 2011, to:Thomas Schaefer, 375 Champion Way, Ballwin, MO 631011, 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] Residential property is assessed at 19% of true value in money (fair market value), Section 137.115.5(1), RSMo
[4] The Owner’s opinion given on the Complaint for Review of Assessment was $383,500, however, it was corrected at the evidentiary hearing to $385,500 – the 2009 Assessor’s value.
[8] 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)
[9] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[10] 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).
[11] 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).
[13] 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.
[14] 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).
[15] 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).
[17] 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).
[20] 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).
[21] 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).