STATE TAX COMMISSION OF MISSOURI
|TYRONE & BRENDA HUGHLON||)|
|v.||)||Appeal No. 17-30004 & 17-30005|
|ROBERT MURPHY, ASSESSOR||)|
|JACKSON COUNTY, MISSOURI,||)|
DECISION AND ORDER
Decisions of the Jackson County Board of Equalization (BOE) are AFFIRMED. Tyron and Brenda Hughlon (Complainants) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Complainants appeared pro se.
Robert Murphy, Assessor of Jackson County, Missouri (Respondent) appeared by attorney Tamika Logan.
Case heard and decided by Senior Hearing Officer John Treu (Hearing Officer).
Complainants appeal on the ground of overvaluation, the decisions of the BOE, as to the true value in money (TVM) of the subject properties. The State Tax Commission (STC) takes these appeals to determine the TVM for the subject properties on January 1, 2017.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the STC from the decision of the BOE.
- Evidentiary Hearing. The Evidentiary Hearing was held on November 15, 2017 at Jackson County Courthouse, Kansas City, Missouri.
- Identification of Subject Property. The subject properties are identified by map parcel numbers or locator numbers 44-330-13-07-00-0-00-000 & 44-330-13-08-00-0-00-000. They are further identified as 6326 Norwood Ct, Raytown, Missouri. (Ex. C, Ex. D, & Ex. 1-3)
- Description of Subject Property. The subject properties are adjoining parcels, both owned by Complainants. The combined parcels consists of a .52 acre tract of land, with one parcel improved by a one and one-half story, single family residential home, with 3,887 square feet of living area. The home was built in 1993. Amenities include four bedrooms, two full bathrooms, one half bathroom, a fireplace, and a 3-car attached garage. The exterior of the home is brick and stucco. (Ex. C, Ex. D, Ex. 1-3 & Testimony)
- Assessment. The Assessor and BOE set the TVM of the parcels as follows:
|Appeal No.||Parcel||Assessor TVM||BOE TVM|
- Complainant’s Evidence. Complainants offered into evidence Exhibits A, B, C, D and their own testimony. Exhibit A consisted of purported comparable properties in Timber Valley, where the subject is located. Exhibit B consisted Complainants’ homeowners agreement. Exhibit C consisted of a Jackson County Assessor 2017 BOE Support Report. Exhibit D consisted of a lot map for parcel 44-330-13-08-00-0-00-000. All exhibits were received without objection.
- Respondent’s Evidence. Respondent offered into evidence Exhibits 1, 2, 3 and the testimony of Darlene Lachey (Lachey). Lachey is employed by the Jackson County Assessment Department. She has been employed since 1994. She currently is a residential appraisal coordinator, acting as an assistant supervisor. She previously served as a senior residential appraiser and prior to that as a residential appraiser. Exhibit 1 consisted of a BOE Support Report. Exhibit 2 consisted of a Summary Report for parcel 44-330-13-07-00-0-00-000. Exhibit 3 consisted of a Summary Report for parcel 44-330-13-08-00-0-00-000. All exhibits were received without objection.
- Presumption of Correct Assessment Not Rebutted. Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessments by the BOE and establish the TVM of the properties, as of January 1, 2017.
CONCLUSIONS OF LAW AND DECISION
The Commission has jurisdiction to hear these appeals 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 determinations of the BOE, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the TVM for the property under appeal. By statute residential real property is assessed at 19% of TVM. Section 137.115.5, RSMo.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the BOE. 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). This presumption is a rebuttable rather than a conclusive presumption. It places the burden of going forward with some substantial evidence on the taxpayer – Complainants. The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the BOE’s valuation is erroneous and what the TVM should have been placed on the property. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
Evidence must be both 1) substantial and 2) persuasive. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse, supra. 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. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
Complainants’ Burden of Proof
In order to prevail, a Complainant must present an opinion of TVM and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2017. Hermel, supra. There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal 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.” See, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003). A valuation which does not reflect the TVM of the property under appeal, is an unlawful, unfair and improper assessment.
Standard for Valuation
Section 137.115, RSMo, requires that property be assessed based upon its TVM 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. 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). TVM is defined in terms of value in exchange and not value in use. 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). It is the TVM of the subject property on the valuation date. Hermel, supra. TVM is the most probable price in terms of money which a property should bring in a 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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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. 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.
Hearsay and Relevance
In evidentiary law there are two important and fundamental concepts relating to the admissibility of evidence, whether in testimonial or documentary form. Those two principles are hearsay and relevance. Either can be sufficient in various circumstances to exclude testimony or documents from coming into the evidentiary record.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
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. 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). 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. 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).
Complainant Fails to Prove TVM
Complainants failed to present substantial and persuasive evidence to establish a TVM as of January 1, 2017, for the subject property. Complainant’s evidence did not induce belief in the Hearing Officer. Furthermore, Respondent presented the opinion of Lachey, who opined a TVM of $263,000 for both parcels, of which she attributed $3,000 TVM to parcel 44-330-13-08-00-0-00-000, the empty, adjoining lot. All of Respondent’s evidence supports the TVM’s of the BOE.
Complainants’ evidence regarding “comparables” was not substantial and persuasive. Complainants’ opinion of TVM was not established by any recognized approach for the valuation of real property. The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences. Complainants’ have no specialized experience, education, or background involving the valuation of property.
Complainant’s offered Exhibit A into evidence. Exhibit A consisted of purported comparable properties in Timber Valley, where the subject is located. However, no adjustments were made by Complainant to the “comparables” in Exhibit A, consistent with generally accepted guidelines for the appraisal of property of the subject’s type. Adjustment are necessary to properly account for the various differences between the subject and each purported comparable.
The assessed valuations for the subject property as determined by the BOE for tax year 2017, are AFFIRMED.
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
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 139.031.8, 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 December 5, 2017.
STATE TAX COMMISSION OF MISSOURI
Senior Hearing Officer
Certificate of Service
Delivery or Notice of the information contained in this Order was made via email or U.S. Postage on December 5, 2017, to the following: