VON WEISE GEAR, ) ) Complainant, ) ) v. ) Appeal Number 00-57001 ) BILL OVERSCHMIDT, ASSESSOR, ) FRANKLIN COUNTY, MISSOURI, ) ) Respondent. )
DECISION AND ORDER
HOLDING
Decision of the Franklin 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 $5,372,000, assessed value of $1,788,876.
Complainant appeared by Counsel, Thomas J. Campbell, St. Louis, Missouri.
Respondent appeared by Counsel, Mark S. Vincent, County Counselor.
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 on January 1, 2000.
SUMMARY
Complainant appeals the decision of the Franklin County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $8,856,219 (assessed value of $2,952,073, as personal property). A hearing was conducted on June 19, 2001, at the Assessor's Conference Room, North Annex, Union, Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant's Evidence
Complainant prefiled the following exhibits:
Exhibit A 2000 Business Personal Property & Manufacturer's Equipment Declaration for Complainant.
Exhibit B Board of Equalization Decision Letter.
Exhibit C City of St. Clair 2000 Personal Property Tax Bill.
Exhibit D Franklin County 2000 Personal Property Tax Bill.
Exhibit E Appraisal Report of Roger F. Chantal, ASA.
Exhibit F Written Direct Testimony of Mr. Chantal.
Exhibit G Written Direct Testimony of Ron Hemmelgarn.
All exhibits were received into evidence. Mr. Chantal testified under cross-examination and re-direct examination. Mr. Chantal proffered his opinion of value of $5,372,000 as the fair market value of the subject property.
Respondent's Evidence
Respondent prefiled the following exhibits:
Exhibit 1 Appraisal Report of Larry E. Sikes, Appraiser for Respondent
Exhibit 2 Written Direct Testimony of Mr. Sikes.
Mr. Sikes was tendered for cross-examination. After a brief interrogation, Counsel for Respondent withdrew Exhibits 1 and 2 and submitted the case with Respondent relying on the presumption in favor of the Board's valuation. Accordingly, Exhibits 1 and 2 and the cross-examination of Mr. Sikes at Tr. 35, Line 7 through Tr. 39, Line 13, do not constitute any part of the record in this appeal for purpose of rendering a decision.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Franklin County Board of Equalization.
2. The subject property consists of machinery and equipment, plant furniture and fixtures, office machines and office furniture and fixtures of Complainant located at 100 St. Clair Industrial Park, St. Clair, Missouri. The property is identified by Assessor's Account Number 033778. A complete listing of the various items of personal property is shown in Exhibit A, pages 11 through 30.
3. Complainant's evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 1999, to be $5,372,000, as proposed, assessed value of $1,788,876 ($5,372,000 x .333 = $1,788,876).
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
The appraisal presented on behalf of Complainant provides substantial and persuasive evidence to both rebut the presumption of correct assessment and establish value for the subject property at $5,372,000. The appraisal by Mr. Chantal utilized a sales comparison approach for those items of property for which comparable sales data could be obtained. Other items of property for which sales data could not be obtained were valued through the development of a cost approach.
For the sales comparison approach, the appraiser researched the market and was able to find sales data on approximately 447 individual items of property. Exhibit A, pp. 11-30. Many of the individual items of property were the same, for example there were a number of computers of the same make and manufacturer. Mr. Chantal researched market data from published market data sources. These include: IDT Tristar, Mitsubishi Grinders, Rob Leonard - Sales; Koepfer, Dennis Gimpert - Sales; L&M Publications, Inc., DataRef Computer System; L&M Publications, Inc., Used Graphic Arts Printing Equipment; Orion Blue Book, Computer; Orion Blue Book, Copiers/Typewriters; Orion Blue Book, Hand Power Tools. Exhibit A, p. 6. Such market data sources are recognized within the appraisal industry for purposes of valuation of machinery, tools, equipment, office furniture, computer equipment and other items which make up the property under appeal in this case.
The remaining items, for which the appraiser was not able to find market data, were valued under a cost approach. In performing his cost approach, Mr. Chantal took the cost for each item of machinery and equipment and applied an index factor to arrive at a replacement cost new. He then applied depreciation based on life expectance guidelines and depreciation tables for the various categories of personal property. The index factors and deprecation tables were obtained from the Marshal and Swift Valuation Service. This is a recognized source of data for appraisals.
The Chantal appraisal was performed within appropriate guidelines and standards for appraisal of property such as the subject property. It is based upon data which is recognized and accepted for appraisal of machinery and equipment.
Counsel for Respondent questioned Mr. Chantal concerning certain aspects of his appraisal. One of the points addressed by Counsel related to the use of auction sales by the appraiser. The appraiser's testimony set forth some important factors relating to the usefulness of auction sales of machinery and equipment. Tr. 6 - 34, Testimony of Mr. Chantal.
An auction value is a sale value and vice versa. An auction does not mean a forced liquidation. Auctions of machinery and equipment are held day-in and day-out throughout the country. Sellers of equipment, whether they are selling an entire plant or a few pieces within a plant, don't want to wait a long period of time for the items to sell. The desire is to sell it as soon as possible. Such sellers do not generally make a lot of inquiries to attempt to find out who might be interested in purchasing the equipment. They can utilize an auction to insure a large number of interested buyers.
The auction serves as the best resource for getting something sold at the best price because the auctioneer knows who desires that type of equipment and they send out thousands of inquiries, invitations to the auction. Auctions bring thousands of people to the marketplace. It is not inconceivable that most auction sales bring fifty percent of the cost new of the equipment.
When items are put up for auction they are not advertised as forced liquidation, or an orderly liquidation, or just a sale. It is simply an auction. An auction brings a large number of willing buyers to the bidding table. An auction does not bring certain values from property being auctioned under some type of distress or forced liquidation situation, and other values for property not being sold under some type of distress. An auction represents a marketplace which is unaffected by a distress situation which may have forced the equipment to be sold.
Complainant's appraisal was substantial and persuasive evidence to rebut the presumption of correct assessment by the Board and to establish value of the subject property.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Franklin County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2000 is set at $1,788,876.
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 Franklin 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 August 8, 2001.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Chief Hearing Officer