State Tax Commission of Missouri
TOMAX DEVELOPMENT,)Appeal Number 07-10103
RUTH ROSE ROTT, TRUSTEE,)Appeal Number 07-10104
)
Complainants,)
)
v.)
)
PHILIP MUEHLHEAUSLER, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decisions of the St. Louis County Board of Equalization reducing the assessments made by the Assessor are SET ASIDE.Complainants rebutted the presumption of correct assessment by the Board.
True value in money for the subject property in Appeal No. 07-10103 for tax years 2007 and 2008 is set at $3,255,000, commercial assessed value of $1,041,600.
True value in money for the subject property in Appeal No. 07-10104 for tax years 2007 and 2008 is set at $1,995,000, commercial assessed value of $638,400.
Evidentiary hearing was held on August 14, 2008 at theSt. LouisCountyGovernmentCenter,Clayton,Missouri.
Complainant appeared by Counsel, Thomas R. Green,St. Louis,Missouri.
Respondent appeared by Assistant County Counselor, Carl W. Becker.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
The Commission takes these appeals to determine the true value in money for the subject properties on January 1, 2007.
SUMMARY
Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject properties.
The Assessor determined an appraised value of the property in Appeal 07-10103 of $4,945,400, assessed value of $1,582,530, as commercial property.The Board reduced the value to $4,633,000, assessed value of $1,482,560.
The Assessor determined an appraised value of the property in Appeal 07-10104 of $3,060,400, assessed value of $979,328, as commercial property.The Board reduced the value to $2,867,000, assessed value of $917,440.
Complainant proposed a value for the combined properties as a single economic unit of $5,250,000, assessed value of $1,680,000.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainants’ Evidence
Complainant offered into evidence the testimony of David J. Sebelius, Missouri State Certified General Real Estate Appraiser.Mr. Sebelius appraised the property at a fair market value as of January 1, 2007, of $5,250,000 for the two properties combined as a single economic unit.The appraiser considered the Cost, Sales Comparison and Income approaches to value.He developed the Sales Comparison and Income approaches to arrive at his opinion of value.Exhibit A (Appraisal Report) and Exhibit B (Written Direct Testimony of Mr. Sebelius) were received into evidence, with no objections.Mr. Sebelius also testified under cross and redirect examination.
Respondent’s Evidence
Respondent elected to offer no evidence in the appeal.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainants timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
2.The subject property is located at 9901 Watson Road, St. Louis, Missouri.The property is identified by parcel numbers 25M330634 (Appeal # 07-10103) and 25M330643 (Appeal # 07-10104).The property consists of 6.83 acres improved by a 78,848 gross square foot retail shopping center. The two properties constitute a single economic unit.[1]
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.Complainants’ evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2007, to be $5,250,000 for the two properties combined.
5.The Assessor and Board valued the property in Appeal No. 07-10103 at 62% of the combined values of the two properties.The value of $5,250,000 will be allocated at $3,255,000 (62%) for the property in Appeal No. 07-10103 and $1,995,000 for the property in Appeal No. 07-10104.The assessed values as commercial properties for the respective properties are $1,041,600 and $638,400.
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.[2]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[3]The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board is accepted as true only until and so long as there is no substantial evidence to the contrary.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.[4]Complainants’ evidence met the required standard and rebutted the presumption, as well as, establishing true value in money for the property under appeal.
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.[5]It is the fair market value of the subject property on the valuation date.[6]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.[7]
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.[8]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.[9]Complainants’ appraiser arrived at an opinion of fair market value relying on two of the three accepted appraisal methodologies.
Complainants Met Burden of Proof
In order to prevail, Complainants 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, 2007.[10]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.”[11]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[12]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.[13]
Complainants met their burden of proof.The appraisal report and testimony of Mr. Sebelius constituted substantial and persuasive evidence to establish fair market value at $5,250,000 for the combined properties as a single economic unit.In the absence of any evidence to the contrary, an allocation of that value in the same percentage as applied by the Assessor and the Board is appropriate.
ORDER
The assessed valuations for the subject properties as determined by the Board of Equalization forSt. LouisCountyfor the subject tax day are SET ASIDE.
The assessed value for the subject property in Appeal No. 07-10103 for tax years 2007 and 2008 is set at $1,041,600.
The assessed value for the subject property in Appeal No. 07-10104 for tax years 2007 and 2008 is set at $638,400.
A party may file with the Commission an application for review of this decision within thirty days of the mailing of such decision.The application shall contain specific 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 appeal is based will result in summary denial. [14]
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 a 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 September 12, 2008.
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 12thday of September, 2008, to:Thomas Green, 1830 Craig Park Court, Suite 202, St. Louis, MO63146, Attorney for Complainant; Carl Becker, Assistant County Counselor, Attorney for Respondent; Philip A. Muehlheausler, Assessor; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
___________________________
Barbara Heller
Legal Coordinator
[3] 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).
[4] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[5] 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).
[7] 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.
[8] 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).
[9] St. Joe Minerals Corp., supra; 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).
[11] 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).