State Tax Commission of Missouri
WILLIAM & MYRA BOVY,)
v.) Appeal Number 11-80502
PUTNAM COUNTY, MISSOURI,)
DECISION AND ORDER
Decision of the Putnam County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2011 and 2012 is set at $327,740, residential assessed value of $62,270.Complainants appeared pro se.Respondent appeared in person and by Prosecuting Attorney, Thomas Keedy.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
Complainants appeal, on the ground of overvaluation and discrimination, the decision of the Putnam County Board of Equalization, which reduced the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
1.Jurisdiction.Jurisdiction over this appeal is proper.Complainants timely appealed to the State Tax Commission from the decision of the Putnam County Board of Equalization.A hearing was conducted on December 8, 2011, at the Putnam County Courthouse, Unionville, Missouri.
2.Discrimination Abandoned.Complainants marked the ground of discrimination as a basis for their appeal.However, no evidence was presented by Complainants upon which it could be determined that the Assessor or Board of Equalization had by any intention plan assessed the property under appeal at a ratio greater than 19% of true value in money, or at a ratio greater than the average 2011 residential assessment ratio for Putnam County.Therefore, the claim of discrimination was deemed to have been abandoned at hearing.
4.Subject Property.The subject property is located at 32225 Brant Lane, Unionville, Missouri.The property is identified as parcel – Prairie Rose 014.The property consists of a 28,964 square foot lake lot on Lake Thunderhead. The lot is improved with a 2,016 square foot home built in 2002.The residence has six rooms, with three bedrooms, two full and one half bath rooms, a full basement, and attached garage and a covered two slip boat dock.
5.Complainant’s Evidence.Complainants testified in their own behalf.Their testimony addressed the matter of why their lot should be valued as a cove lot and not as a main channel lot.
Complainants offered Exhibit A into evidence.All pages of the except pages 8, 9 and 10 were received into evidence.Exhibit A contained the following pages:
1 & 2
3 & 4
Plats showing subject lot on Lake
Photographs – Views from Subject’s shore line
6 & 7
2005 Property Record Card – Subject
8 – 10
Plat, Photos and PRC of Lot 42 Meadow Rue – Lake Thunderhead
Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2011, to be $204,000, as proposed.See, Complainants Fail To Prove Value – $204,000, infra.
5.Respondent’s Evidence.Respondent testified in his own behalf.Mr. Rouse testified that in accordance with the directive of the Board of Equalization, that he had made a further adjustment to the appraised value of Complainant’s property relative to adjustment for decks and patios.This resulted in a further reduction in the appraised value to $327,740, and assessed value of $62,270.Exhibit 1 – two photographs of views from the subject lot – was received into evidence.
Respondent called Scott D. Johnson of Vanguard Appraisals, Inc., to testify relative to how values had been assigned to the lots at Lake Thunderhead and the process utilized to “square” up lots to establish an effective front footage as opposed to actual front footage.See, Testimony of Mr. Johnson, infra.
CONCLUSIONS OF LAW AND DECISION
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.
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.The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.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.Complainant’s failed to present evidence to meet the required standard, accordingly, the presumption of correct assessment by the Board was not rebutted.
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.True value in money is defined in terms of value in exchange and not value in use.It is the fair market value of the subject property on the valuation date.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.
Complainants Fail To Prove Value – $204,000
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, 2011.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.”
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.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.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.The opinion of value of $204,000 propounded by Complainants was not established by substantial and persuasive evidence.There was no supporting evidence to establish that as of January 1, 2011 that a willing buyer and seller would have paid that amount for the property under appeal.
Cove Lot verses Main Channel Lot Argument
Complainants’ case was based on a single claim that the subject lot should be valued based upon its front footage as a cove lot and not as a main channel lot on the lake.The evidence tendered all addressed this point from a subjective position of the view from the Complainant’s shoreline.The establishment of front foot values for lot lakes at Lake Thunderhead was not established based upon a subjective basis as to what one would view looking directly out from any given piece of shoreline.
Testimony of Mr. Johnson
The testimony of Scott D. Johnson established how front footage values were derived and also how lots were squared to account for odd shapes and arrive at an effective front footage, as opposed to actual front footage.The valuation of the Lake Thunderhead lots was based upon a land study conducted in 2004 by Mr. Johnson for the Putnam County Assessor’s Office.This study concluded lot values based on cost for improvements, as well as land values.While lots were described as main lake, cove or off water lots, the valuation was not derived from any determination that a lot would be valued based upon what the view toward the lake was.Value was driven by what was being paid for unimproved lots and the cost for improvements.Along the shoreline – main channel and coves – values would increase or decrease based upon the objective data as to what lots were bringing.From the study, it was determined that values of $600, $350, $125 and $100 would be assigned to lots accordingly to their locations.
Mr. Johnson explained that in order to address a variety of lots with various widths and depths that an effective front foot is calculated for each lot.The effective front foot takes into account irregular shaped lots with varying front footages.Essentially, the front 25% of a lot is allocated 40% of its value, the next 25% of the lot is allocated 30% of the value, the third 25% has 20% of the value and the last 25% received the final 10% of the value.
The calculation of the effective front footage accounts for the difference, for example, in one lot with a front footage of 125 feet, a depth of 175 feet and a back lot footage of only 50 feet and the lot lying beside it that has only 50 front feet, a depth of 175 feet and a back lot footage of 125 feet.A squaring off of these lots to determine effective front footage and allocation of value based upon depth factors results in a uniformity of value for such different lots.The
methodology utilized is recognized and accepted as an important tool for use in the mass appraisal of lake lots.
The critical point established from all of the testimony of Mr. Johnson is that there is a uniform and equitable system in place for the valuation of the lake lots at Lake Thunderhead under the Assessor’s mass appraisal costing system.Accordingly, the value assigned to Complainants’ land under the cost approach utilized by the Assessor for the County’s mass appraisal is consistent as to all other lots at the Lake.The fact that in a given situation one lot might command a different front foot sale price than another very similar lot does not negate the fact that the system in place for valuation of the lots is being appropriate utilized for its purpose – land valuation under the mass appraisal cost approach in a uniform manner.
Complainants failed to present any market data to establish that as of January 1, 2011 a willing buyer and seller would have agreed to a price of $204,000 for the sale and purchase of their property.Therefore, the value of $327,740 concluded by the Assessor upon instruction of the Board for changes to valuation for decks and patios is affirmed.
The assessed valuation for the subject property as determined by the Board of Equalization for Putnam County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2011 and 2012 is set at $62,270.
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, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
The Collector of Putnam 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 29, 2011.
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 29thday of December, 2011, to:William Bovy, 32225 Brant Lane, Unionville, MO 63565,Complainant; Tom Keedy, Prosecuting Attorney, 1802 Lincoln Street, P.O. Box 205, Attorney for Respondent; Paul Rouse, Assessor, Putnam County Courthouse, Room 201, Unionville, MO 63565-1600; Chrystal Perkins, Clerk, Putnam County Courthouse, Unionville, MO 63565; Sharon Thompson Parks, Treasurer & ex officio Collector, Putnam County Courthouse, Room 200, Unionville, MO 63565.
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
 Excluded upon objection on the grounds of hearsay and relevance.Complainant’s did not tender the author of the letter to lay the foundation for it to be admitted.The letter was not relevant to establish Complainants’ claim that their lot should be valued as a cover lot based upon where it sat and its view.It in fact rebutted the taxpayer’s claim.
 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)
 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).
 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.
 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).
 Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).