STATE TAX COMMISSION OF MISSOURI
| VANCE HIGGS, | ) | |
| ) | ||
| Complainant(s), | ) | Appeal No. 21-10129 |
| ) | Parcel No. 28O530134 | |
| v. | ) | |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
Vance Higgs (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2021, was $560,000. Complainant alleges overvaluation and claims that the TVM as of that date was 467,250.[1] Complainant did not produce substantial and persuasive evidence of overvaluation. The BOE decision is affirmed. The TVM of the subject property on January 1, 2021, was $560,000.
The evidentiary hearing was held on May 4, 2022, via Webex. Complainant appeared pro se. Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, was represented by counsel, Tim Bowe. The case was heard and decided by Senior Hearing Officer Benjamin C. Slawson.
FINDINGS OF FACT
- The Subject Property. The subject residential real property is located at 786 Villa Gran Way, Fenton, Missouri. The property borders the Fabick Nature Preserve and three other residential subdivisions. The subject property consists of 5.125 acre lot and a single family ranch-style home. Complainant bought the lot in 1995, began construction of the residence in 1998, and finished construction in 2000. The open-concept home has around 2,400 square feet of living space, including a large foyer, kitchen, dining room, living room, one bedroom, two and a half bathrooms, laundry room, mud room, and a sun room which is does not have heat or air conditioning. Complainant designed the layout of the home and was a general contractor when it was built. Complainant did not recall the exact cost of construction. Complainant has not made any significant improvements to the property, nor has he listed it for sale in the last three years.
- Assessment and Valuation. Respondent classified the subject property as residential and determined the TVM on January 1, 2021, was $661,000. The BOE determined the TVM of the subject property as of January 1, 2021, was $560,000.
- Complainant’s Evidence. Complainant introduced the following Exhibits which were admitted without objection:
| Exhibit | Description |
| A | Photograph of foyer of subject property |
| B | Photograph of master bathroom of subject property |
| C | Flyer/advertisement from early 2022 of realtor Krista Hartmann with a list of recent sales in Fenton |
| D | Another flyer/advertisement from early 2022 of realtor Krista Hartmann with a list of recent sales in Fenton |
Complainant testified that his opinion of value as of January 1, 2022, for the subject property is $467,250. Complainant arrived at this figure by taking the 2019 appraised value by Respondent, $445,000, and increasing it by 5% which he believes is reasonable. Complainant testified that he believes that the BOE overvalued his property due to the fact that Complainant believes the subject property is not desirable for several reasons.
Complainant testified that the reason the subject’s lot was never developed by one of the other subdivisions is that it is shaped “literally like an auditorium.” Because it is not flat but very hilly with varying elevations, Complainant’s opinion is that development as part of a subdivision would be very difficult. The lot is also considered as a flag lot, which means Complainant’s road access is very narrow and other homes cannot be built off of the driveway. In other words, it is landlocked. After heavy rains causing erosion, Complainant said he has to regrade some of the hillside with his mini-excavator.
Complainant testified that he designed the home to suit the needs of himself, his wife at the time, and their son. Complainant said he did not design the home to have resale value, another aspect he says contributes to it being worth less than other homes in the area. For example, Complainant argued that not many homes in his area only have one bedroom. Complainant feels this is also why Respondent cannot accurately appraise his home – because Respondent is not able to find comparable sales with the same, unique characteristics as his home. Complainant stressed that in Exhibits C and D, a list of recent sales in a realtor’s advertisement, show that there are no one-bedroom houses which have recently sold. Complainant also testified that for the last twenty years since he built the home, save for one two-year period, Respondent’s assessment has increased with every new assessment cycle.
Complainant stated that he essentially made all of these same overvaluation arguments to the BOE when he did that hearing. Complainant testified that he is not a licensed appraiser.
- Respondent’s Evidence. Respondent introduced Exhibit 1, the BOE’s October 29, 2021, Decision Letter. Complainant did not object. Respondent’s Exhibit 1 was admitted into evidence.
- Value. The TVM of the subject property as of January 1, 2021, was $560,000.
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). The TVM is “the fair market value of the property on the valuation date[.]” 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). “True value in money is defined in terms of value in exchange not value in use.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020) (internal quotation omitted). “Determining the true value in money is an issue of fact for the STC.” Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008).
“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. The STC has wide discretion in selecting the appropriate valuation method but “cannot base its decision on opinion evidence that fails to consider information that should have been considered under a particular valuation approach.” Id., at 348.
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. “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977). 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). “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 taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs, 599 S.W.3d at 7. The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous.” Id. (internal quotation omitted). The taxpayer also must prove “the value that should have been placed on the property.” 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 v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (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”).
- Complainant Did Not Produce Substantial and Persuasive Evidence of Overvaluation.
Complainant did not produce substantial and persuasive evidence to support his opinion of value of $467,250.
The comparable sales approach is typically used to value residential properties improved with a single-family home. “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).
Complainant’s Exhibits C and D do contain a list of sales in Fenton provided by a local realtor. However, little information was provided by Complainant regarding the sale dates, sale conditions, distance from the subject property, conditions of the properties, and detailed data of the characteristics of these properties other than the general number of bedrooms and bathrooms. Because this data is not available, it is impossible to use these sales as comparable sales to accurately determine the value of the subject property to show overvaluation. In addition, while the sales prices are provided, these sales are not persuasive evidence as no adjustments are made to account for differences between the subject property and these other properties.
Complainant also feels that the subject property should be valued lower due to the unique characteristics of the property’s lot and the house itself. However, Complainant neither demonstrated that the BOE’s valuation fails to take into account these attributes, nor did Complainant provide proof of the specific detrimental monetary impact that these attributes allegedly have on the TVM of the subject property.
Even if Complainant had rebutted the presumption of correct valuation by the BOE, Complainant has not proven that the TVM of the subject property is $467,250 as of January 1, 2021. While a property owner’s opinion of value is generally admissible, the opinion lacks “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).
Complainant did not produce substantial and persuasive evidence showing that the subject property was overvalued by the BOE. Therefore, Complainant’s evidence does not provide the necessary foundation and elements to support his overvaluation claim. Because the STC “cannot base its decision on opinion evidence that fails to consider information that should have been considered” under a recognized approach to value, Snider, 156 S.W.3d at 348, the BOE decision is affirmed.
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2021, was $560,000.
Application for Review
A party may file 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 of Missouri, 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, and 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 the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.
SO ORDERED September 9, 2022.
STATE TAX COMMISSION OF MISSOURI
Benjamin C. Slawson
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on September 9, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Noah Shepard
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, sec. 14; Section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.