STATE TAX COMMISSION OF MISSOURI
|WELKER VENTURES LLC,||)||Appeal No. 21-30050 through 21-30051|
|Complainants(s),||)||Parcel/locator No(s): 61-500-03-01-01-0-00-000 and|
|GAIL MCCANN BEATTY,||)|
|JACKSON COUNTY, MISSOURI,||)|
ORDER AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On June 3, 2022, State Tax Commission (STC) Senior Hearing Officer Erica Gage (Hearing Officer) entered a Decision and Order (Decision) affirming the Jackson County Board of Equalization’s (BOE) assessment of the subject property as of January 1, 2021. Welker Ventures LLC (Complainant) timely filed an Application for Review of the Decision and Order of the Hearing Officer. Gail McCann Beatty, Assessor, Jackson County, Missouri, (Respondent) timely filed a Response.
We AFFIRM the Decision of the Hearing Officer. Segments of the Hearing Officer’s Decision may have been incorporated into our Order without further reference.
FINDINGS OF FACT AND PROCEDURAL HISTORY
The subject property is identified by Parcel Locator Nos. 61-500-03- 01-01-0-00-000 and 61-500-03-01-02-0-00-000. The subject property is further identified as being located at 313 SE Oldham Pkwy, Lee’s Summit, Jackson County, Missouri. The subject property is commercial property consisting of an industrial flex building with two units, A and B, totaling 4,359 square feet. Complainant purchased the subject property in October 2019 for $457,900.
Respondent assessed the subject property as commercial property as of January 1, 2021, with a true value in money (TVM) of $190,000 per parcel, for a total TVM of $380,000. Complainant appealed Respondent’s assessment to the BOE, and the BOE determined the total TVM of the subject property as of January 1, 2021, was $457,900, which was the same as Complainant’s purchase price for the subject property.
Complainant timely filed an appeal of the BOE’s assessment to the STC. The appeal proceeded to an Evidentiary Hearing in which both parties were represented by counsel and presented evidence. The Hearing Officer subsequently issued the Decision finding that Complainant had not presented substantial and persuasive evidence to rebut the BOE’s valuation and to place a different value on the subject property. The Hearing Officer further found that Respondent, while not required to present evidence, had presented evidence supportive of the BOE’s valuation. The Decision found that the TVM of the subject property as of January 1, 2021, was $457,900.
Complainant timely filed an application for review. The STC thereafter issued its Order allowing the application for review and granting Respondent time to file a response. Respondent timely filed a response.
CONCLUSIONS OF LAW
Complainant’s Points on Review
Complainant alleges the Hearing Officer’s Decision was erroneous because:
- The Hearing Officer found that Complainant did not produce substantial and persuasive evidence to establish Respondent overvalued the subject property; and
- The Hearing Officer’s Decision was “unlawful, unfair, improper, arbitrary, or capricious” in that the TVM of the subject property was not modified to reflect the assessed valuations Respondent had placed on comparable properties.
Standard of Review
A party subject to a Decision and Order of a hearing officer of the STC may file an application requesting the case be reviewed by the STC. Section 138.432. The STC may then summarily allow or deny the request. Section 138.432. The STC may affirm, modify, reverse, set aside, deny, or remand to the Hearing Officer the Decision and Order of the Hearing Officer on the basis of the evidence previously submitted or based on additional evidence taken before the STC. Section 138.432.
For the reasons that follow, the Commission finds Complainant’s arguments to be unpersuasive. The Commission, having thoroughly reviewed the whole record and having considered the Hearing Officer’s Decision, the application for review of Complainant, and the response of Respondent, affirms the Hearing Officer’s decision.
The taxpayer in a STC appeal, not the assessor, bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, Complainant bears the burden of proving by substantial and persuasive evidence 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); 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 Comm’n, 804 S.W.2d 387, 392 (Mo. App. W.D. 1991). Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Comm’n, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. 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). Respondent, when advocating a value different from that determined by the BOE, 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. Hermel, Inc. v. State Tax Comm’n, 564 S.W.2d 888, 895 (Mo. banc 1978); Cupples Hesse Corp., 329 S.W.2d at 702; Brooks, 527 S.W.2d at 53.
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property – its highest and best use.” Snider, 156 S.W.3d at 346-47. “The method depends on several variables inherent in the highest and best use of the property in question.” Id. at 347. “Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transaction and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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 interest;
- 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.
See 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.
Missouri courts have held that the actual sale price of a property is not “conclusive” for tax purposes, but competent evidence of the price paid for property, i.e., a voluntary purchase not too remote in time from the date of assessment, may be relevant for establishing the property’s value at the time of the assessment. St. Joe Minerals Corp. v. State Tax Comm’n, 854 S.W.2d 526, 529 (App. E.D. 1993)
Here, the record reveals that Complainant purchased the subject property in October 2019, approximately 15 months prior to the assessment date of January 1, 2021, for $457,900. There was no evidence indicating the purchase was something other than a voluntary, open-market purchase between a typically-motivated buyer and seller. Consequently, sale price is relevant for establishing the subject property’s value as of January 1, 2021.
Complainant Exhibits A and B relied upon information Complainant had obtained from Respondent, the Jackson County Parcel Reviewer database, and the Jackson County Property Search database. Exhibit A reviewed data that had been included in Respondent’s Exhibit 1. Exhibit B specifically showed data related to comparable properties that had sale dates ranging from February 2019 and September 2021 and had sale prices ranging from $427,400 and $510,000. However, neither Exhibit A nor Exhibit B made any market-based adjustments to the comparable properties to account for similarities and differences between them and the subject property. Neither Exhibit A nor Exhibit B described any factors, such as condition issues, to support a downward adjustment of the subject property’s value. Neither Exhibit A nor Exhibit B explained whether any of the comparable properties exhibited condition issues that might have impacted their values. In other words, Exhibits A and B did not provide a sales comparison approach to valuing the subject property but provided only a summary of raw data that compared unadjusted sale prices to values upon which properties had been assessed, presumably to encourage the fact finder to draw the conclusion that the value upon which the subject property had been assessed was wrong. This technique for comparing values is not an approved approach to finding value and is sometimes referred to as “comparative assessment.”
Complainant’s exhibits made no adjustments for differences between the other properties and the subject property and did not provide substantial and persuasive evidence upon which the Hearing Officer could properly conclude that the subject property’s value as determined by the BOE was incorrect and Complainant’s opinion of value was correct. See 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).
To the extent Complainant argues that the subject property was improperly assessed because the comparable properties were placed on the assessment roll at values less than 100% of their sale prices, it should be noted: (1) Complainant’s own exhibits establish that two of the comparable properties were not sold until September 2021, nine months after the assessment date and two months after the assessment roll closed pursuant to Section 137.375; (2) Complainant’s own exhibits highlighted differences between the subject property and the comparable properties that could have contributed to the differences in their values as reported on the assessment roll; and (3) Complainant’s argument on this point is another form of comparing values using “comparative assessment.”
The Decision of the Hearing Officer is supported by the evidence in the record and is not erroneous, unfair, or capricious, and the Decision properly applied the law and valuation methodologies to the facts in evidence.
The Decision of the Hearing Officer is AFFIRMED. Segments of the Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, may have been incorporated by reference, as if set out in full, in this final decision of the Commission.
Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140 within 30 days of the mailing date set forth in the Certificate of Service for this Order.
If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8.
If no judicial review is made within 30 days, this decision and order is deemed final and the Collector of Jackson County, 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.
SO ORDERED August 26, 2022.
STATE TAX COMMISSION OF MISSOURI
Gary Romine, Chairman
Victor Callahan, Commissioner
Debbi McGinnis, Commissioner
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on August 26, 2022, to: Complainant(s) and/or Counsel for Complainant(s), Respondent and/or Counsel for Respondent and County Collector.
 Missouri operates on a two-year reassessment cycle for valuing real property. See Section 137.115.1 RSMo. Absent new construction or improvements to a parcel of real property, the assessed value as of January 1 of the odd year remains the assessed value as of January 1 of the following even year. Id. All statutory references are to RSMo. 2000, as amended, unless otherwise indicated.
 Comparative assessment is not a proper method for finding the TVM for a property. The assertion that another property’s assessment should be the basis for correcting the subject property’s assessment is not substantial and persuasive evidence establishing the BOE’s value of the subject property specifically was incorrect. The logic of using comparative assessments to determine value is internally faulty, i.e., if one concludes that the subject property’s assessment was incorrect based upon the assessment of other properties, then one must conclude that the assessment of the other properties also was incorrect.
STATE TAX COMMISSION OF MISSOURI
|WELKER VENTURES LLC,||)||Appeal No. 21-30050 through 21-30051|
|Complainants(s),||)||Parcel/locator No(s): 61-500-03-01-01-0-00-000 and|
|GAIL MCCANN BEATTY,||)|
|JACKSON COUNTY, MISSOURI,||)|
DECISION AND ORDER AMENDED NUNC PRO TUNC1
Welker Ventures LLC (Complainant) appeals the Jackson County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2021, was $228,950 per parcel, total $457,900. Complainant claims the property is overvalued and proposes a value of $217,950. Complainant did not produce substantial and persuasive evidence establishing overvaluation. The BOE’s decision is affirmed.2
1 This Decision and Order is amended nunc pro tunc to correct a scrivener’s error in the paragraph identifying the names of counsel for Complainant. This Decision and Order and its date of issue remains otherwise unchanged.
2 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, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
Complainant was represented by counsels Todd Hauser and Christine Bushyhead. Respondent was represented by counsel Jennifer Ware. The evidentiary hearing was conducted on April 6, 2022, via Webex.
FINDINGS OF FACT
- Subject Property. The subject property is located at 313 SE Oldham PKWY, Units A and B, in Jackson County, Missouri. The parcel/locator numbers are 61-500-03- 01-01-0-00-000 and 61-500-03-01-02-0-00-000.
Subject property is an industrial flex building. Both units A and B are mirrored layouts with a total of 2,180 square feet each, with a total square footage of 4,359 square feet for the entire building. Complainant purchased the subject property in October 2019, for $457,900.
- Respondent and Respondent classified the subject property as commercial and determined the TVM on January 1, 2021, was $190,000 per parcel (total $380,000). The BOE classified the subject property as commercial and independently determined the TVM on January 1, 2021, was $457,900.
- Complainant’s Evidence. Complainant’s exhibits contend the TVM of the subject property, both parcels combined, on January 1, 2021, was $217,950. Complainant presented no testimony. Complainant submitted the following exhibits:
|A||Comparables from Assessor’s Appraisal||Admitted|
|B||Complainant’s Comparable Properties from
Complainant submitted its Exhibit A, which indicates the comparables used by Respondent in Exhibit 1 had much higher sales prices than their current assessed values in Jackson County for 2021. (See Exhibit A). Exhibit A compares three similar properties with the subject property that Complainant explains are on the same “block,” as outlined in the following chart:
|Property Address||Subject Property||401 SE Oldham Pkwy||305 SE Oldham Pkwy||99 SE Oldham Pkwy|
|Building Size||4,359 square feet||5,000 square feet||3,000 square feet||5,400 square feet|
Complainant’s Exhibit B includes a chart purporting to show that Respondent’s comparables are assessed at a value much lower than the sale price. Complainant cited St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, (Mo.App.1993), to argue that the purchase price alone cannot be the basis for value.
Complainant submitted no appraisal of the property. Complainant submitted no evidence of income, cost, or sales comparison approaches to value. Complainant submitted no evidence as to how Complainant calculated the proposed TVM of $217,950.
4. Respondent’s Evidence. Respondent submitted Exhibit 1 and the written direct testimony (WDT) of Brian Everly, Senior Commercial Real Estate Appraiser employed by Jackson County since 2016 and with 40 years of appraisal experience. Exhibit 1 is the appraisal report determining the TVM of the subject property, both parcels combined, on January 1, 2021, was $457,900. Exhibit 1, copy submitted on or about February 11, 2022, (hereinafter “copy 1”) was admitted into evidence without objection.
Complainant objected to Respondent’s Exhibit 1 (submitted on or about April 6, 2022, hereinafter “copy 2”), WDT, and testimony of Mr. Everly due to the (1) lack of actual knowledge of Mr. Everly of the information contained within “copy 1” and (2) the untimely late filing of “copy 2.” To support the objection, Complainant points to “copy 1” as not being signed by Mr. Everly, instead being signed by Joshua Lisenbee, an employee of Jackson County in training for commercial appraisal. Complainant filed a written objection on or about April 4, 2022, to the WDT of Mr. Everly on these grounds. Complainant further objected to any and all of Mr. Everly’ s testimony and moved at the hearing to strike testimony from the record due to the absence of Mr. Lisenbee.
“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 authenticity of a document cannot be assumed; instead, what it purports to be must be established by proof. Thus, before a document can be admitted into evidence and considered by the [circuit] court, its proponent must show that it is, in fact, what it is purported to be.” Brown v. Chipotle Servs., LLC, No. WD 84613, 2022 WL 677881, at 3 (Mo. Ct. App. Mar. 8, 2022), reh’g and/or transfer denied (Apr. 28, 2022) (internal quotation omitted). “Hearsay evidence is objectionable because the person who makes the statement offered is not under oath and is not subject to cross-examination.” Saint Louis Univ. v. Geary, 321 S.W.3d 282, 291 (Mo. banc 2009). Hearsay is inadmissible unless an exception applies. Id.
Mr. Everly testified he prepared and supervised Joshua Lisenbee in the preparation of the report. Section 536.070(11) requires:
“the results of statistical examinations or studies, or of audits, compilations of figures, or surveys, involving interviews with many persons, or examination of many records, or of long or complicated accounts, or of a large number of figures, or involving the ascertainment of many related facts, shall be admissible as evidence of such results, if it shall appear that such examination, study, audit, compilation of figures, or survey was made by or under the supervision of a witness, who is present at the hearing, who testifies to the accuracy of such results, and who is subject to cross-examination, and if it shall further appear by evidence adduced that the witness making or under whose supervision such examination, study, audit, compilation of figures, or survey was made was basically qualified to make it.” (Emphasis added.)
Mr. Everly testified that he was one of the persons who prepared the report and any portion of the report prepared by Mr. Lisenbee was done under Mr. Everly’s supervision. Therefore, testimony from one of the two appraisers who contributed to the report and supervised its construction is sufficient to authenticate the report and admit any testimony from Mr. Everly regarding it. Mr. Everly’s testimony and WDT are admitted.
Regarding any objection related to an untimely filing of “copy 2” signed by Mr. Everly, the only distinguishable difference between the copies of the reports is the signature. Therefore, the untimeliness of “copy 2” is not sufficient for its exclusion from evidence due to the de minimis change. The facts in evidence support this conclusion because the WDT of Mr. Everly, not Mr. Lisenbee, was submitted on or about February 11, 2022. Hence, Mr. Everly was the witness Respondent had planned to testify at the hearing. The record implies that Complainant was aware Mr. Everly would testify at the evidentiary hearing given that Complainant submitted a written pre-trial objection to the WDT of Mr. Everly himself; therefore, Complainant cannot argue unfairness, surprise or any other justification commonly cited to allow exclusion of a late-filed document. The record supports the conclusion that the lack of a signature on “copy 1” was a harmless oversight, which Respondent rectified by filing “copy 2” following Complainant’s objection. Complainant’s objections to the admission of the testimony of Mr. Everly, the WDT of Mr. Everly, and the Exhibit 1 “copy 2” are overruled. Therefore, all testimony and exhibits are admissible and relevant and are admitted and will be considered for the weight deemed appropriate.
Respondent’s Approaches to Value
Exhibit 1 utilizes the income and sales comparison approaches to estimate the market value of the subject property. The cost approach was not developed.
Mr. Everly testified that the county used information from recent sales of three comparable properties. Mr. Everly testified that the information was verified through CoStar and that he made market-based adjustments to those sales. The comparable properties are similar to the subject property with respect to location, size, and highest and best use. The comparable properties differ from the subject property with respect to age. Mr. Everly testified the subject property’s location was desirable and influenced his appraisal. Under the sales comparison approach, the appraiser estimated that the subject properties had a total TVM of $472,000.
Mr. Everly’s income approach used a cap rate of 8.5% to calculate a value of $460,000. Mr. Everly testified the valuation was based on his evaluation of CoStar rent values listed, which were used for the market rent input into his calculation.
5. Value. The TVM of the subject property on January 1, 2021, was $228,950 per parcel, total $457,900.
CONCLUSIONS OF LAW
1. 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. Commercial real property is assessed at 32% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(c). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” 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). Determining the TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).
“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; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).
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.
The income approach “is most appropriate in valuing investment-type properties and is reliable when rental income, operating expenses and capitalization rates can reasonably be estimated from existing market conditions.” Snider, 156 S.W.3d at 347. “The income approach determines value by estimating the present worth of what an owner will likely receive in the future as income from the property.” Id. “The income approach is based on an evaluation of what a willing buyer would pay to realize the income stream that could be obtained from the property when devoted to its highest and best use.” Id. (internal quotation omitted). “When applying the income approach to valuing business property for tax purposes, it is not proper to consider income derived from the business and personal property; only income derived from the land and improvements should be considered.” Id.
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). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012). “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.
3. Complainant’s Burden of Proof
The BOE’s valuation is presumptively correct. Rinehart v. Laclede Gas Co., 607 S.W.3d 220, 227 (Mo. App. W.D. 2020). To prove overvaluation, a taxpayer must rebut the BOE’s presumptively correct valuation and prove the “value that should have been placed on the property.” Snider, 156 S.W.3d at 346. The taxpayer’s evidence must be both “substantial and persuasive.” 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, 722 S.W.2d at 77 (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”). A taxpayer does not meet his burden if evidence on any essential element of his case leaves the STC “in the nebulous twilight of speculation, conjecture and surmise.” See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).
4. Complainant Did Not Prove Overvaluation.
Complainant argues the subject properties’ total value is $217,950. Complainant’s argument in support of this value is based on the exhibits, which include comparable assessments and listings of sales prices of nearby properties found, in Complainant’s opinion, to be similar to the subject property. Complainant relies largely on the properties on the same “block” as the subject property, none of which recently sold, and Respondent’s valuations of those other properties for 2021. (See Exhibit A) However, comparative assessment is not the method used to find a TVM for a property. Complainant did not present an appraisal of the subject property to determine a value of the subject property. To rely on similar assessments without an appraisal that includes adjustments for similarities and differences between the subject property and the comparable properties would be speculative and an improper method of estimating the subject property’s TVM as of January 1, 2021. Complainant also did not develop the income or cost approach to value. While a property owner’s opinion of value is generally admissible, the opinion “is without 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 use any adjustments for any other properties in Exhibits A and B. The sum total of data submitted by Complainant is simply assessments and listings or raw sales data of comparable properties. Complainant’s evidence does not make adjustments to comparable properties to find a proper appraisal comparison. Therefore, all of the comparable data and proposed valuations submitted in Complainant’s exhibits is both speculative and incomplete.
The assertions within Complainant’s exhibits, which discuss Respondent’s supposed errors in methodology and alleged incorrect assessments, are not substantial and persuasive evidence that the BOE’s valuation of the subject property is erroneous. General assertions about the shortcomings of the methodology of Respondent and how such methodology causes increases in the assessment of certain properties does not speak specifically as to the TVM of the subject property.
Although not required given the burden of proof, Respondent presented Exhibit 1 and testimony that the data in Exhibit 1 supported the BOE’s valuation of the subject property. Respondent’s evidence persuasively supports the TVM of $457,900.
In an STC hearing, Respondent “shall not advocate nor present evidence advocating a valuation higher than that value finally determined by the assessor or the value determined by the BOE, whichever is higher, for that assessment period.” Section 138.060.1. If Respondent introduces “evidence indicating a higher value than the value finally determined by the assessor or the value determined by the board of equalization such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.” 12 CSR 30- 3.075(1).
Respondent’s Exhibit 1 concludes the market value of the subject properties is higher than the value determined by Respondent or the BOE. Respondent, however, did not advocate a value higher than that determined by the BOE. Exhibit 1 is admissible as evidence for sustaining the value assigned by the BOE. 12 CSR 30-3.075(1). Respondent’s evidence establishes that the BOE’s total value of $457,900 is correct.
CONCLUSION AND ORDER
The BOE decision is affirmed. On January 1, 2021, in Appeal No. 21-30050 the subject property had a TVM of $228,950 and in Appeal No. 21-30051 the subject property had a TVM of $228,950.
Application for Review
A party may file with the Commission 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, 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.
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.
SO ORDERED June 3, 2022.
STATE TAX COMMISSION OF MISSOURI
Erica M. Gage
Senior Hearing Officer State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by
U.S. Mail on June 3, 2022, to:
Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Amy S. Westermann Chief Counsel