Westward Development Inc. v. Tracy Baldwin, Assessor, Clay County, Missouri

October 7th, 2022


) Parcel/locator No(s): 05-117-00-05-013-000
Complainant(s), )
v. )
Respondent. )


Westward Development Inc. (Complainant) appeals the Clay County Board of Equalization’s (BOE) decision finding the subject residential property is not exempt from ad valorem taxation and that its true value in money (TVM) was $1,905,500 as of January 1, 2021.  Complainant asserts the subject property is exempt from ad valorem taxation due to charitable purposes. The subject property is exempt from ad valorem taxation for tax year 2021. The BOE decision is SET ASIDE.[1] The parties waived their opportunity for an evidentiary hearing and agreed to submit the appeals on the record.[2]  Complainant, represented by counsel, Michael LeVota, and Respondent, represented by counsel, Lucas Wallingford, each submitted their respective evidence for appeal on the record. In addition to exhibits, Complainant and Respondent timely submitted briefs, which are incorporated into the record. On July 19, 2022, Complainant submitted an additional untimely responsive brief; as the record was closed, the responsive brief was not admitted into evidence or considered in the making of this decision.


  1. Subject Property. The subject property is located at 400 Cherokee Dr., Clay County, Missouri. The parcel/locator number is 05-117-00-05-013-00.

The subject property is operated as New Beginnings Apartments and consists of 63 HUD rental units. The specific use of the units is as residential facilities for low income, elderly, and handicapped tenants with less than $5,000 in assets. Complainant is a non for profit Missouri Corporation. New Beginnings staff provide additional equipment, handicapped supplemental assistance as needed, and social programs. Complainant’s tenants are charged $596 for one bedroom units and $537 for studio units or 30% of their income.

  1. Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2021, was $1,905,500 and that the property was not exempt. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2021, was $1,905,500 and not exempt.
  2. Complainant’s Evidence. Complainant submitted Exhibits 1 through 24, which have been relabeled A through X, by the Senior Hearing Officer, to their corresponding alphanumerical character, and Written Direct Testimony (WDT) of T. David Rogers. All exhibits were admitted into evidence and are summarized as follows:




Certificate of Incorporation




Internal Revenue Service Exemption Letter


Missouri State Sales Tax Exemption


Tax Invoice and 2019 Receipt


Financial statements 2020 and 2021


T David Rogers Authorization to sign


Current HAP-HUD 5 Year Contract through 2027


Comparable Property with Rent Comparison/ Written Tenant Selection Criteria Policy


Waiting List


Affirmative Fair Housing Marketing Plan 2019


HUD Regulatory Agreement


T David Rogers Narrative


Mona Narrative


2021 Summary of Activities


Occupancy Application for Tenancy for New Beginnings


2020 IRS 990


HUD Budget and Cash Flows


Town Square Management Agreement


2019 Clay County Application for Tax Exempt


HUD Fair Assistant Monthly Application


Comparable Property with Rents


Jackson County Exempt Status


Social Programs for New Beginnings


Complainant submitted the WDT of T. David Rogers, who serves as Property Manager of New Beginnings Apartments for Westward Development Inc. Mr. Rogers testified New Beginnings Apartments is operated as a charitable organization pursuant to Section 137.016 RSMo and Section 4(b) of Article X of the Missouri Constitution and that the property has operated under Section 202 of the Housing Act of 1959, as a non-profit elderly housing facility pursuant to a HUD Regulatory Agreement and HUD regulations recorded on or about September 6, 1985 on the Complainant’s Apartment Project (See WDT at 4 and Exhibit L). Mr. Rogers testified “supplemental assistances” are provided to tenants, include providing “lifts, which are anchored to the ceilings, to allow wheel chair residents to independently lift themselves in and out of bed”. (See WDT at 3). Rogers testified the staff of Complainant assist its elderly and disabled clients with many tasks to “allow them to pursue an independent living life style, including changing lightbulbs, providing an independent social room and events for many social functions like playing cards, birthdays, bingo etc”. (See Exhibits M, N, O and WDT at 3). Rogers testified “they are also assisted with other functions such as, meals on wheels, income tax preparation, voting, library, potlucks, programs and other social events. Some of the social programs provide to New Beginnings’ residents are summarized in Exhibit X [formerly Exhibit 24]”. (See Exhibits M, N, O, X and WDT at 3). Complainant’s evidence provides none of the residents are allowed under HUD guideline to have assets in excess of $5,000. Rogers testified “all of the much assistance provided by the staff of New Beginnings creates an environment which allows independent living and keeps our renters from being a burden to society and governments. This charitable organization was originally chartered and established by a duly charitable religious organization, and for the past 36 years has carried out the original religious founder’s desire to create a charitable environment that lessened burdens on society pursuant to137.016 RSMo and Section 4(b) of Article X of the Missouri Constitution.” (WDT at 3-4).

Complainant submitted the organizational documents, federal tax exempt status and HUD contracts. (Exhibits A-L and P-S). Rogers testified tenants pay rental payments equal to the 30% of their income and any remaining balance of each tenant’s monthly HUD approved total payment is paid by HUD pursuant to New Beginnings’ HAP Contract (Housing Assistance-Section 8 of the Contract). (Exhibits H, P and WDT at 4-5). Complainant also submitted 2019 Clay County Application for Exemption and Jackson County tax information for the subject property. (Exhibits T and S).

  1. Respondent’s Evidence. Respondent submitted Exhibits 1 through 24.
Exhibit Description
1 Property Record Card
2 Assessors-Manual – Ch.2 – Rev.02092021
3 Missouri Charitable Property Tax Exemption – Handout
4 2019 Application
5 Articles of Incorporation
6 Bylaws
7 Financial Statement
8 HAP-HUD 5 year contract through 2027
9 HUD regulatory agreement
10 HUD Fair Assistant monthly application
11 HUD budget and cash flows
12 Occupancy Application For Tenancy for New Beginnings
13 Written Tenant Selection Criteria Policy
14 HUD Rent Schedule
15 Affirmative Fair Housing Marketing Plan. 2019
16 Town Square Management Agreement
17 2017-IRS 990
18 2018-IRS 990
19 2019-IRS 990
20 2020-IRS 990
21 2021 Summary of Activities
22 Complainant’s Answers to Respondent’s Interrogatories
23 Complainant’s Responses to Respondent’s Request for Production of Documents
24 Written Direct Testimony of Shannon Galloway



  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.  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).

  1. Evidence

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).  “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).

  1. Complainant’s Burden of Proof

        “Tax exemptions are construed strictly against the taxpayer, and any doubt must be resolved in favor of application of the tax.” SEBA, LLC v. Dir. of Revenue, 611 S.W.3d 303, 313–14 (Mo. banc 2020).  Exemptions are “allowed only upon clear and unequivocal proof, and any doubts are resolved against the party claiming it.”  Id. (internal quotation omitted).[3] 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).

  1. Charitable Exemption

Complainant asserts the subject property is exempt from taxation pursuant to section 137.100(5) because it is used exclusively for charitable purposes and is not held for private or corporate profit.  “Tax exemption statutes are to be strictly but reasonably construed so as not to curtail the purpose and intended scope of the exemption.”  City of St. Louis v. State Tax Comm’n, 524 S.W.2d 839, 843–44 (Mo. banc 1975).  A taxpayer claiming an exemption must produce “clear and unequivocal proof” the exemption applies and “all doubts are resolved against the taxpayer.”  Ben Hur Steel Worx, LLC v. Dir. of Revenue, 452 S.W.3d 624, 626 (Mo. banc 2015).

In pertinent part, section 137.100(5) exempts from taxation:

All property, real and personal, actually and regularly used exclusively … for purposes purely charitable, and not held for private or corporate profit, except that the exemption herein granted does not include real property not actually used or occupied for the purpose of the organization but held or used as investment even though the income or rentals received therefrom is used wholly for religious, educational or charitable purposes[.]

Determining whether the subject property qualifies for the Section 137.100(5) charitable exemption, requires application of “the three-part test established in Franciscan Tertiary Province of Missouri, Inc. v. State Tax Commission, 566 S.W.2d 213, 224 (Mo. banc 1978).”  United Cerebral Palsy Ass’n of Greater Kansas City v. Ross, 789 S.W.2d 798, 800 (Mo. banc 1990).

Franciscan first requires that the property be actually and regularly used exclusively for purposes purely charitable as defined in Salvation Army v. Hoehn, 354 Mo. 107, 188 S.W.2d 826, 830 (1945).”   United Cerebral Palsy Ass’n, 789 S.W.2d at 800.  “The phrase ‘exclusively used’ has reference to the primary and inherent use as over against a mere secondary and incidental use.”  Salvation Army v. Hoehn, 354 Mo. 107, 115, 188 S.W.2d 826, 830 (Mo. 1945).  “If the incidental use … does not interrupt the exclusive occupation of the building for [charitable] purposes, but dovetails into or rounds out those purposes,” then the property may be considered to be used exclusively for a charitable purpose. Id. Complainant’s evidence does determine that the property will be used exclusively for charitable purposes as housing for handicapped, elderly, and low income persons, therefore this portion of the Franciscan test is met by clear and unequivocal evidence.

The second part of the Franciscan test requires that the property be owned and operated on a not-for-profit basis.  Franciscan, 566 S.W.2d at 224.  Property is “not held for private or corporate profit” when the profit is incidental to the dominant charitable objective and all profit is devoted to the charitable objectives of the project.  Id.  Complainant’s evidence does determine that the property is not held for private or corporate profit used only as Residential Apartments, therefore this portion of the Franciscan test is met by clear and unequivocal evidence.

The final prong of the Franciscan test requires a showing that the dominant use of the property is for the benefit of an indefinite number of people and must directly or indirectly benefit society generally.  Franciscan, 566 S.W.2d at 224. Respondent argues in their post hearing brief that Complainant cannot claim exemption under this prong because “while living at the subject property may be beneficial for those who are admitted, admission is confined to only those who are sufficiently able to pay their own way that they could find admittance at any federally subsidized housing, whether it styles itself charity or not. There is no benefit conferred to those who are deemed ineligible and rejected, or fail to apply in the first place knowing full well they will not be admitted. Society does not gain from the Complainant’s selective choice of charitable beneficiaries.” (Respondent’s Brief at 22). Complainant argues their organization is for the benefit of those “low income and handicapped tenants” who could be an indefinite number, and thus, directly benefit society generally. (Complainant’s Brief at 2-3).

The requirement of showing a benefit to “an indefinite number of persons … is otherwise characterized as a requirement that the humanitarian service be public.”  Evangelical Ret. Homes of Greater St. Louis, Inc. v. State Tax Comm’n, 669 S.W.2d 548, 554 (Mo. banc 1984) (internal quotation omitted).  A benefit may be “public” if it is not available to all and, instead, is directed at groups with specific needs or interests.  Id.  Thus,

[a] charity may restrict its admissions to a class of humanity, and still be public; it may be for the blind, the mute, those suffering under special diseases, for the aged, for infants, for women, for men, for different callings or trades by which humanity earns its bread, and as long as the classification is determined by some distinction which involuntarily affects or may affect any of the whole people, although only a small number may be directly benefited, it is public. Salvation Army v. Hoehn, 188 S.W.2d 826, 830 (Mo. banc 1945) (quoting In re Rahn’s Est., 291 S.W. 120, 128 (Mo.1926)).

The record shows the benefits of Complainant’s housing and programs are available to handicapped, elderly and low income persons, who could be an indefinite number. As such, it is reasonable for Complainant to define its own application process to assist itself in choosing those served. Despite Respondent’s arguments that a restricted application is too “selective”, this does not bar Complainant from meeting the requirement to benefit the public. Complainant’s application process is not “selective” of persons who may benefit, but rather, it serves an administrative function. This initial information gathering is a necessary and routine practice for Complainant. Further, the evidence shows that the waitlist of applications may be bypassed if a situation arises with extreme low income or may be balanced to comply with HUD; therefore, allowing Complainant some latitude in housing selection in order to benefit as many applicants as possible. (Exhibit I). As Complainant’s housing services are found to benefit to an indefinite number of persons, the third prong of the Franciscan test is met by clear and convincing evidence.


The subject property is exempt from ad valorem taxation for tax year 2021. The BOE’s decision is SET ASIDE. Accordingly, the subject property was exempt for ad valorem assessment purposes as of January 1, 2021.

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.

Disputed Taxes

The Collector of Clay 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 October 7, 2022.


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 October 7, 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, Section 14; section 138.430.1, RSMo 2000.  All statutory citations are to RSMo 2000, as amended.

[2] Section 138.431.5 provides the “hearing officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying, or reversing the determination of the BOE, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.”

[3] See also Am. Polled Hereford Ass’n v. City of Kansas City, 626 S.W.2d 237, 240 (Mo. banc 1982)(noting the taxpayer bears the burden of establishing a property tax exemption “by unequivocal proof that such release is required by the terms of the statute….”); City of St. Louis v. State Tax Comm’n, 524 S.W.2d 839, 845 (Mo. banc 1975)(noting the taxpayer claiming a charitable exemption must make “a clear and convincing showing that the specific activity in question does fall within an accepted category found in the definition”).