USA VACUUM,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 00-34004
	)
RANDY HOLMAN, ASSESSOR,	)
JEFFERSON COUNTY, MISSOURI,	)
	)
Respondent.	)

DECISION AND ORDER

HOLDING

Decision of the Jefferson County Board of Equalization sustaining the assessment made by the Assessor, SET ASIDE, Hearing Officer finds true value in money for the subject property for tax year 2000 to be $453,035, assessed value of $151,012.

Complainant appeared by Counsel, David G. Dempsey, St. Louis, Missouri.

Respondent appeared by Counsel, David Senkel, Hillsboro, Missouri

Case heard and decided by Chief Hearing Officer, W. B. Tichenor.

ISSUES

The Commission takes this appeal to determine the true value in money for the subject property (used plastic injection molds) on January 1, 2000.

SUMMARY

Complainant appeals the decision of the Jefferson County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $1,568,700 (assessed value of $522,900, as personal property). A hearing was conducted on June 26, 2001, at the Jefferson County Courthouse, Hillsboro, Missouri. Additional information was provided by both parties at the request of the Hearing Officer and the record was closed for purposes of entering this Decision on September 4, 2001.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant's Evidence

Complainant filed in advance of the evidentiary hearing the appraisal report of Nancy L. Hopkins (Exhibit A) and the written direct testimony of Ms. Hopkins (Exhibit B). Both exhibits were received into evidence. Ms. Hopkins also testified under cross-examination, re-direct examination an in response to questions asked by the Hearing Officer. Ms. Hopkins opined a value of $920 as the fair market value of the property under appeal.

Exhibit C, a copy of the Depreciation Schedule for Small Business, Large Business, Farm Equipment, Computer Equipment and Computer Equipment with Upgrades, was also received into evidence.

Exhibit D, an affidavit of Nancy L. Hopkins provided in response to the Hearing Officer's Order of July 10, 2001, was received into evidence.

Exhibit E, an affidavit of Nancy L. Hopkins provided in response to the Hearing Officer's Order of August 8, 2001, but under objection by Counsel for Complainant, was received into evidence.

Respondent's Evidence

Respondent prefiled the appraisal report of Michael G. Boynton (Exhibit 1) and Mr. Boynton's written direct testimony (Exhibit 2). Both exhibits were received into evidence. Mr. Boynton also testified under cross-examination, re-direct examination and in response to questions asked by the Hearing Officer. Mr. Boynton's opinion of the fair market value of the subject property to be $1,568,700.

Exhibit 3, a copy of a 37 page document entitled Information from the Society of the Plastics Industry, submitted in response to the August 8, 2001, Order of the Hearing Officer, was received into evidence.

Exhibit 4, a copy of print-out from the Listo Corporation web site, submitted in response to the August 8, 2001, Order of the Hearing Officer, was received into evidence.

Exhibit 5, a copy of a print-out from the PMBC web site, submitted in response to the August 8, 2001, Order of the Hearing Officer, was received into evidence.

Exhibit 6, an affidavit of Michael G. Boynton provided in response to the Hearing Officer's Order of July 10, 2001, was received into evidence.

Exhibit 7, an affidavit of Michael G. Boynton provided in response to the Hearing Officer's Order of August 8, 2001, was received into evidence.

Points of Inquiry by Hearing Officer

Following the conclusion of the evidentiary hearing the Hearing Officer submitted to each party's counsel a request for each of the witnesses to submit an affidavit responding to four (4) points of inquiry which the Hearing Officer upon review of the Transcript and Exhibits did not feel were adequately addressed at the evidentiary hearing. The request for the additional testimony by way of affidavit was taken pursuant to the authority provided in Section 138.430.2 RSMo for inquiry of parties regarding any matter or issue relevant to the valuation of the property under appeal. Order, dated July 10, 2001.

After the submission of the exhibits provided in response to the July 10, 2001 Order (Exhibits D & 6), the Hearing Officer issue a second Order (August 8, 2001) pursuant to Section 138.430.2 requesting each party to subject an affidavit, with any supporting documentation deemed necessary, providing information as to the useful life of the subject molds, their bases and the mold inserts. Counsel for Complainant objected to the request on the grounds that the evidence was irrelevant because the information requested related to a valuation in use (Complainant's Response to Order of August 8, 2001). Exhibits E, 3, 4, 5 and 7 were submitted by the parties. Complainant's objection is a continuing objection and was not waived due to filing Exhibit E in response to the Hearing Officer's Order. Said objection is preserved for purposes of appealing the Hearing Officer's Decision to the Commission under an Application for Review.

FINDINGS OF FACT

1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Jefferson County Board of Equalization

2. The subject property is located at the facility of Koller-Craft Plastic Products, 1400 Old Highway 141, Fenton, Missouri. The property is owned by USA Vacuum, a division of Tacony Corporation. The property is identified by Assessor's Account Number 143031. The property consists of twenty-five (25) P-20 steel plastic injection molds used for casting various components of Simplicity, Riccar and Ultra Lite vacuum cleaners which are manufactured by Complainant. Complainant's expert erroneously included fourteen (14) molds, numbered 952 to 987 in Exhibit A at page 19. Exhibit A, pp. 7, 9, 11, 19 & Appendix B - 22 photographs of various molds; Exhibit 2, Q & A 12 & 13; Exhibit E, Item 4.

3. The subject molds are steel casted molds. Each mold has two halves of formed and shaped steal. Each mold is essentially in the shape of a irregular cube, that is all sides will not be the same size, although opposite sides will be the same side. Each mold has a master mold base, which holds the mold inserts in place during the plastic injection process. The molds are of varying sizes and weights. The molds are custom made for a specific piece of a given vacuum sweeper. They are not designed to be resold or marketed beyond their originally intended purpose. The estimated weights for each individual mold range from 100 to 5,000 pounds. The total estimated weight for all the 25 molds is approximately 40,700 pounds. When each mold is together in a single piece, plastic can be injected into the mold. The injection of plastic into a mold is called a shot. When the shot is completed and the plastic has set, the mold can be separated and the molded piece removed. The molds form parts for vacuum sweepers, including but not limited to, motor covers, nozzle housing, nozzle fillet, dust compartment, agitator filet, base plate clip, fan duct cover, handle lower duct and furniture guard. Once the number of shots has been made with a given mold where it cannot longer produce the specific part to specifications, the mold would be scrapped or it would have to be completely retooled or repaired in order to continue molding the specific part. If the design of a vacuum sweeper is changed and a given part does not fit the new design, the mold making such a part would be scrapped. Exhibit A, p. 19, Appendix B, Photographs; Tr. 7, Lines 13-17; Tr. 11, Line 20 - Tr. 13, Line 3; Exhibit 2, Q & A 16, 17,& 18; Exhibit E, Item 4.

4. There is no market for the sale of the subject used molds as molds. Exhibit A, pp. 15-16; Exhibit B, Q & A 10 & 11; Exhibit 2, Q & A 20.

5. The subject twenty-five molds were purchased new by Complainant in April, 1997, at a cost of $1,731,696. The normal life of the molds is four to five years. This period coincides with the normal production life of a specific part. The history of the Complainant's manufacturing is the products are changed every four to five years due to changing customer preferences. Each time a mold is used to produce a part is called a shot. A mold is manufactured to last for 200,000 shots. Exhibit E, Item 2.

6. The subject molds consist of a base and an insert. Both the base and insert have the same four to five year life. The subject mold bases are stock items and typically cost about $500 each. The molds, including bases and inserts, are purchased as a single unit which is described as being self contained. The bases must be customized to be used with a specific insert. This is done by drilling holes for water lines, heaters and ejector bases. By the time the mold reaches the end of its useful life in about four to five years, the pins and bushings are worn out. Because the cost of replacing the pins and bushings is about $400, Complainant does not retool the bases but disposes of both bases and inserts. It is more economical to purchase a new stock mold base when manufacturing a new mold. Complainant does not reuse any part of the molds at the end of their useful life, nor do they sell the molds. Exhibit E, Item 3.

7. As of January 1, 2000, eleven of the molds had been used for 55,050 shots each, 605,550 shots total, and fourteen had been used for 68,811 shots each, 963,354 shots total. Total of all shots calculates to 1,568,904 shots. Usage (number of shots) increased in years 2000 and 2001. Exhibit E, Item 5.

8. The estimated physical life of all 25 molds new, based upon total shots, would be 5,000,000 shots (200,000 shots per mold x 25 molds - 5,000,000). As of January 1, 2000, the molds had used up 31.38% of their physical life based upon the total number of shots made and the estimated total number of shots which could be made (1,568,904/5,000,000 - 31.38%). The theoretical remaining physical life expectancy, based upon number of shots made was 68.62%. Exhibit E, Item 6.

9. The estimated economic life of all 25 molds new, based upon years of in which the molds could be employed to manufacture parts, would be four to five years (48 to 60 months). As of January 1, 2000, the molds had used up 33 months or 68.75% to 55% of their economic life. Therefore the percent good of the molds was 31.25% to 45%. Exhibit E, Item 6.

10. Exhibits 3, 4 and 5 were not probative on the issue of value, as none of the information addressed the original cost, useful life, physical or economic obsolescence of the subject molds.

11. Respondent's original valuation and the valuation presented at hearing, applying one of two different general depreciation schedules, is not appropriate for the valuation of the property under appeal, as it (1) did not account for the actual physical deterioration of the used molds as of January 1, 2000, nor (2) did it account for the economic depreciation of the molds as of January 1, 2000, and it (3) arbitrarily applied one depreciation schedule when there is not legal or practical basis for selecting a depreciation schedule which results in a higher value over a schedule which would result in a lower value.

12. The Board presumption of proper assessment was rebutted due to its valuation being based on an arbitrary selection of a depreciation schedule by the Assessor in his original valuation and due to it not accounting for actual physical and economic depreciation of the property being valued.

13. The true value in money of the subject property as of January 1, 2000 was $453,035, assessed value of $151,012. (See, Calculation of Value, pp. 17-18).

CONCLUSIONS OF LAW

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. 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. Section 138.431.4, RSMo.

Board of Equalization Presumption

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. 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).

Standard for Valuation

Section 137.115, RSMo 1994, 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. 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). It is the fair market value of the subject property on the valuation date. Hermel, supra, at 897.

Complainant's Burden of Proof

In order to prevail, Complainant 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, 1999. Hermel, supra, at 897. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). 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).

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, supra.

Trier of Fact

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert's testimony and accept it in part or reject it in part. St. Louis County v. Boatmen's Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion of inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinion or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence. Section 490.065, RSMo; Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. W.D. 1992).

DECISION

Complainant's Methodology for Valuation

Complainant's expert witness considered both a cost and income approach for valuation of the subject molds. However, neither was used due to insufficient information available for property similar to the subject. Ms. Hopkins attempted to perform a sales comparison approach to value. Exhibit A, pp. 15-17; Exhibit B, Q & A 9.

She contacted plastics equipment appraisers, dealers, re-sellers and manufacturers in eight states. She specifically researched whether there was a market for used molds used to manufacture vacuum cleaner parts. She inquired as to whether any of the appraisers, dealers, re-sellers or manufacturers had ever sold used steel plastic injection molds. She found no evidence that used injection molds such as the subject were ever sold because they are used to make specific parts which are not adaptable to other manufacturers. The tooling engineer for Koller-Craft Plastic Products informed Ms. Hopkins that the company had disposed of a number of molds for a customer two to three years ago. He was unable to find anyone to purchase them, even as scrap metal so they were simply discarded. She concluded that the most likely market for the subject molds would be for sale to a scrap metal dealer. Exhibit A, pp. 15-17; Exhibit B, Q & A 10 & 11.

To value the molds as scrap metal, Ms. Hopkins determined that as of January 2000 the used steel price in the St. Louis Metropolitan Area was approximately two (2) cents per pound. She estimated the weight of each mold based on size (height x width x depth). A cubic inch of P-20 steel weighs .283 pounds. The weight of all the subject molds was calculated to be 40,700 pounds. The estimated cost to haul the molds was determined to be $200.00. Therefore, the net fair market value in exchange for the subject molds as of January 1, 2000, as scrap metal would be $414. (40,700 x .02 = $814 - $200 = $414). Exhibit A, pp. 16, 17 & 19; Exhibit B, Q & A 11; Exhibit E, Item 4 - Note: Calculations were made by the Hearing Officer based on the original methodology of Ms. Hopkins, using the revised weight figures subtracting the molds which were purchased after January, 2000.

Respondent's Methodology for Valuation

Respondent's method of valuation for his original valuation, as well as, for the evidentiary hearing in this appeal was identical. This is the methodology which the Board of Equalization relied upon in sustaining the Assessor's valuation. Mr. Boynton did not perform an appraisal of the subject molds. He submitted an estimate of use value. He submitted an estimate of use value based upon various statements from The Appraisal of Real Estate relating to valuation of special use properties. Exhibit 2, Q & A 9 & 10. To arrive at the use value of the subject molds, Mr. Boynton took the acquisition costs as reported by Complainant to the Respondent for 1999 and 1998. He then applied depreciation factors from the Large Business Depreciation Schedule (business with assessed values in excess of $1,000,000). Exhibit C. A factor of five percent (5%) was applied to the total acquisition costs in the year 1999 and a factor of ten percent (10%) was applied to the total acquisition costs in the year 1998. This is the same calculation that was made on the Business Personal Property Tax Declaration filed by Complainant with Respondent. Exhibit 1, pp. 2 & 14; Exhibit 2, Q & A 23.

Mr. Boynton testified that he took trended figures for the 1998 costs. He admitted that no specific trending factors appeared on the original personal property rendition submitted, but it appeared that trending had already been applied. However, no explanation is provided as to what trending factors were used or where such trending factors for steel plastic injection molds were obtained, or what the basis for the conclusion that trending had been done by Complainant, when there are no instructions on the form directing a taxpayer to perform a trending of past years' costs. Exhibit 2, Q & A 22 & 23, Exhibit 1, pp. 2 - 14.

Respondent's appraiser valued the molds based upon their special and restricted use. His valuation was a valuation in use for the specific purpose which the molds were made. His valuation methodology was to take the cost acquired, as reported on the Complainant's personal property declaration and multiply those acquisition costs time set depreciation factors, or percent good values. Mr. Boynton elected to use a depreciation table which is employed in Jefferson County for businesses with over one million dollars in assessed values (large business). Another depreciation schedule is also used in Jefferson County for businesses with assessed values under one million dollars (small business).

The two depreciation schedules valued property based upon year of acquisition costs according to the following percentages to arrive at fair market value.

Small Business                                Large Business

No explanation was provided as to why the exact same piece of property bought in the same year for the same price by two different business should be depreciated at a faster rate for small businesses than for large businesses. Furthermore, the assessed value of the property under appeal was less than $1,000,000 so it would appear that it should have at least been assessed based upon the small business depreciation schedule. However, since under state statutes there is no provision for depreciating personal property of one business at a different rate than another business based only upon the total assessed value of each business, the use of the large business schedule was arbitrary and capricious in both the original valuation and Mr. Boynton's valuation of the subject molds.

There was no market data to establish that the subject molds would only depreciate five or ten percent in the first year, or only ten or twenty percent through the second year. There was no market data to support the proposition that the molds would retain a value after six years of forty to fifty percent of acquisition cost. Respondent's valuation relying on either of the two depreciation schedules is not appropriate for the subject molds, since they do not have a useful life in excess of four to five years and have no residual value, beyond scrap value.

Bussman Decision

Respondent takes the position that the case of Bussman Division of Cooper Industries v. State Tax Commission, 802 S.W.2d 543 (Mo. App. E.D. 1991) is controlling for the valuation of the subject property. The Bussman case was a 1989 Commission Decision. Bussman Division, Cooper Industries v. Kenneth D. Morton, Assessor, St. Louis County, Missouri, STC Appeal No. 98-10262, February 24, 1989. An examination of the Bussman decision is therefore warranted.

The facts in Bussman are similar in certain aspects to the present appeal, and different in others. The Bussman property involved dies which were inserted into presses and other machines to cut stamp or otherwise form the component parts of fuses and other products. Bussman owned both the machines into which the dies were inserted and the dies. In the present appeal the subject molds are owned by USA Vacuum, while the plastic injection machinery to which the molds are attached for making vacuum cleaner parts are owned by Koller-Craft Plastic Products. There was no showing that the Koller plastic injection machinery and the USA Vacuum molds are bought and sold as a single piece of equipment or a single system of machinery.

In Bussman the taxpayer's expert determined that there would be no market for the dies if they were offered for sale alone or even as scrap. He acknowledge the dies were never sold by themselves. The expert for St. Louis County agreed that there was no market for the dies separate and apart from the machinery and equipment in which they are used, but that the relevant market for the dies is as an integral part of an operating manufacturing plant. The dies in dispute in Bussman had in fact sold in 1985 as a part of the machinery and equipment in which they were used in the manufacturing plant when Cooper Industries purchased Bussman. No such sale of the subject molds and plastic injection machinery exists in the present appeal, nor does it appear any such sale would be likely since it would involve a joint sale of molds and a manufacturing facility of USA Vacuum and a sale of plastic injection machinery and the manufacturing facility of Koller.

The most important factor which must be addressed from the Bussman case is what the Court actually decided and what it did not address. The Court simply determined that the Commission's decision was supported by competent and substantial evidence, was not arbitrary or capricious or unreasonable and did not involve an abuse of discretion. Bussman, at 545. The Court applied the basic rules for dealing with the quasi-judicial decisions of an administrative body. The evidence must be considered in a light most favorable to the Commission. Where the evidence would support either of two opposed findings, the Court is bound by the administrative determination. Courts are not to substitute their judgment for the expertise of the Commission in matters of property tax valuation. Bussman, at 544-545. The Court did not determine that items of personal property such as dies must be valued only on a reproduction cost, less depreciation. The exact methodology for valuation must be left to the evidence presented in each particular case.

To the extent that Respondent's position is or may be that Bussman stands for the proposition that valuation of the subject molds must be by a cost, less depreciation method, that position is in error and is accordingly rejected.

Valuation

When the issue presented is in the terms of what would a willing buyer and seller agree to for the subject molds, the conclusion of both Complainant's and Respondent's witnesses are in agreement, there is no market for the used molds. Used molds are not bought and sold, either during their useful life or at the end of their useful life. Such items of property are only bought new from an entity which manufactures molds. The molds are only purchased by the end user of the mold, the business entity which placed the order for specifically designed molds. There are no buyers and sellers for used plastic injection molds.

Although new the molds suffer no physical or functional obsolescence, however, they immediately have an economic depreciation factor given that they cannot be used except for a specific purpose and no one would purchase the molds except to be used for that specific purpose. The molds, due to model changes every four or five years, begin to suffer from a form of economic obsolescence which increases with each passing year.

These molds are not like a piece of equipment that when purchased new can be put to use in a multitude of manufacturing concerns. The subject molds can only be used to make specific parts for specific vacuum cleaners which are only manufactured by Complainant. Furthermore, the molds can only make parts over a four to five year period since at the end of that period the market for vacuum cleaners will require various changes and alterations in individual parts which will render the subject molds totally useless, even if they might still be able to make parts.

On the other hand, if the molds were to take the number of shots they are designed to take before the end of the four or five year period, they would reach the end of their useful (physical) life before that time period. In other words they would be totally physically depreciated and have no value for making parts, since they could not do so. There is no market data to support any valuation of these molds as used items of property for purposes of molding plastic parts for vacuum cleaners, the only use to which these particular items of property can be put.

Complainant in filing out its personal property declaration indicated acquisitions in 1998 and 1999. However, it appears that these were in fact the years in which various molds were reported as having been moved into Jefferson County from St. Louis County. It is clear from Ms. Hopkins affidavit that the information which was provided to her establishes a purchase new of the molds in April, 1997. Exhibit E, Item 2.

Physical Depreciation

As of January 1, 2000, the molds had experienced physical depreciation of 31.38% based upon the total number of shots which had been made. In other words, the useful physical life of the molds is limited by the number of shots which they can take before they can no longer be used. Utilizing this physical depreciation factor as applied to the original manufacturing cost of $1,731,696 would result in an indicated value of $1,188,290 ($1,731,696 x .3138 = $543,406.21, rounded to $543,406; $1,731,696 - $543,406 = $1,188,290). This would only account for physical obsolescence.

Economic Obsolescence

Since the molds would still be able to function for the purpose for which they were designed, there would not need to be any adjustment for a functional obsolescence factor. However, the useful life of these molds is further limited by the economic conditions of changing customer preferences, which historically has called for a change every four to five years. In other words, even though the molds might at the end of four or five years still have some remaining physical life, economic conditions demanding a change in the products being manufacturer would render the molds useless at the end four or five year.

Depending upon whether the four or five year economic life is used an additional depreciation factor of 68.75% or 55% would also be applied. This would result in indicated values in use of $371,340 and $534,730 for a four and five year economic life respectively (4 year: $1,188,290 x .6875 = $816,949.38, rounded to $816,950; $1,188,290 - $816,950 = $371,340; 5 year: $1,188,290 x .55 = $653,559.50, rounded to $653,560; $1,188,290 - $653,560 = $534,730). This would result in an indicated value as of January 1, 2000, of $453,035, using the average of the four and five year economic life of the molds ($371,340 + $534,730 = $906,070/2 = $453,035), assessed value of $151,012 ($453,036/3 = $151,011,67, rounded to $151,012).

Highest and Best Use

In concluding on the value for the property under appeal, consideration has been given to the highest and best use of the used molds. For machinery and equipment, a highest and best use analysis will not always be either appropriate or applicable. Valuing Machinery and Equipment, Machinery and Technical Specialities Committee of the American Society of Appraisers, 2000, p. 213. This valuation exercise is a quite unique problem in which some consideration should be given to the highest and best use of the subject property.

The molds can only perform a single function. That function can only be performed for a limited period before the molds will not possess the physical characteristic which will permit them to continue to mold parts. Once a certain level of shots (injections of plastic) has been made the molds will have reached the end of their physical and functional lives. At that point they become scrap and may only have the scrap value advocated by Complainant, if any value at all. In like manner, after a certain time period (4 to 5 years on average), when design changes are made to the parts which are being molded, irrespective of whether the molds have reached the end of their physical lives, they will reach the end of their economic lives. At that time they will no longer have any value for making of plastic parts and may only have the scrap value advocated by Complainant.

Distinguished From Other Personal Property Appeals

Complainant's molds are not like various items of personal property (machinery and equipment) which have been the subject of appeals before the Commission in other cases, in which various pieces of equipment can be valued from an active market for used machinery and equipment. (See, P. D. George v. Daly, STC Appeal 97-20316, March 21, 2000, Order Granting Application for Review, August 10, 2000, (Daly v. P. D. George Co., Cause No. 004-2046, Circuit Court City of St. Louis, April 24, 2001); St. Clair Die Casting Company v. Overschmidt, STC Appeal 00-57002, 5/16/01; Watlow Industries v. Ruhl, STC Appeal 00-81000, 8/8/01. Pohlman, Inc. v. Gogarty, STC Appeal 00-10023, 9/6/01.) In the cases cited and more than 15 similar appeals, the items of used property being valued could be bought and sold in an active market from which they could and would continue to be used for the purposes for which the individual items (pumps, drill presses, machine lathes, tanks, office furniture, computers, etc.) were originally designed although possibly in a different manufacturing industry than that from which they would be sold.

Consistency With Valuation Principle of Common Items

As of the valuation date Complainant's molds were being utilized for the purpose designed by the manufacturer. Therefore, they were being employed in the reasonably probable and legal use that was physically possible and financially feasible. Uniform Standards of Professional Appraisal Practice, Standard 7, Subsection 3(a). The valuation of these used molds by discounting the cost to manufacture the molds by both a physical component and an economic component is consistent with the valuations made of more common articles of machinery and equipment made in other cases. In the case of common articles, it is recognized that the items will continue to be used for the purpose for which they were designed. In the vast majority of those cases, there exists a reliable market from which valuation data can and must be extrapolated in order to arrive at a proper valuation. A methodology of making deductions from cost to manufacture would neither be warranted nor appropriate in such instances where market data is available. In a valuation grounded in actual sales data (sales comparison approach) or supported by appropriate market analysis (cost approach), the property is not being valued on the economic value to the present owner of an individual item of machinery or equipment.

Unique Items Valuation

In those limited and rare cases of unique and special items of personal property (dies for manufacturing fuses, molds for plastic parts or similar items) where no market data exists, valuing the property utilizing the historical cost to manufacture with appropriate deductions for physical, functional (if applicable) and economic obsolescence will provide the only methodology whereby a reasonable estimate of the value of such atypical and uncommon pieces of personal property can be reached. Such an approach to valuation recognizes that the singular item or items of personal property will continue to be both physically and economically capable of carrying out the purpose for which they were designed and manufactured without valuing the actual economic value to the present owner. Accordingly, neither a standard and traditional sales comparison valuation, nor this limited cost to manufacture less actual depreciation valuation, values the economic use to the individual owner of any given unique articles of personal property. The restricted methodology relied upon in this unique instance to determine true value in money is recognition that the subject molds are not bought and sold in any active market, but can continue to be used for the purpose for which they were designed and manufactured.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Jefferson County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax year 2000 is set at $151,012.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial. Section 138.432, RSMo 1994.

If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Jefferson 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. If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

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 November 6, 2001.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Chief Hearing Officer