USA VACUUM,	)
DIVISION OF TACONY CORP.,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 01-34018
	)
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 2001 to be $$316,710, assessed value of $105,570.

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

Respondent appeared by Counsel, David Senkel, Hillsboro, Missouri.

Case heard by Hearing Officer, Aimee L. Smashey.

Case decided by Chief Hearing Officer, W. B. Tichenor, with the concurrence of Hearing Officer Smashey

ISSUES

The Commission takes this appeal to determine the true value in money for the subject personal (manufacturing) property (used plastic injection molds) on January 1, 2001.

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 $2,140,890 (assessed value of $713,630, as personal (manufacturing) property). Complainant proposed a value of $770 (assessed value of $257), in its Complaint for Review of Assessment. The valuation of the subject property was appealed to the Commission for tax year 2000, a Decision and Order was rendered in that appeal on November 6, 2001 (STC Appeal No. 00-34004), herein after 2000-Decision.

A hearing was conducted on February 19, 2003, at the Jefferson County Courthouse, Hillsboro, Missouri. Pursuant to Section 138.431.4, RSMo, this appeal was transferred to Chief Hearing Officer, W. B. Tichenor, for the drafting of the Decision and Order, subject to review by Hearing Officer, Aimee L. Smashey.

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

Complainant's Evidence

Complainant offered into evidence the following exhibits:

Exhibit A  Written direct testimony of Nancy L. Hopkins, personal property specialist of Property Assessment Review.

Exhibit B  Supplemental written direct testimony of Nancy L. Hopkins.

Exhibit C  Written direct testimony of David T. Hamm, Director of Research and Development, Floor Care Division, Tacony Corporation (parent corporation of Complainant).

Exhibit D  Updated Appraisal of Ms. Hopkins, with detail sheets, identified as D-A, D-B, D-C, D-D, D-E, D-F, & D-G, for the subject property.

Exhibit E  Appraisal Report for January 1, 2000 (STC Appeal 00-34004) on the subject property.

Exhibit F  Recalculation of value for Group 1 assets.

Exhibit G  Tooling Cost Comparison - 2002 vs. 1998.

Exhibit H  Pages 106-107, Valuing Machinery and Equipment: The Fundamentals of Appraising Machinery and Technical Assets, American Society of Appraisers, (2000).

Exhibits A through H were received into the record. Ms. Hopkins and Mr. Hamm testified under cross-examination, redirect and recross. Mr. Hamm also testified in rebuttal. Tr. 17-67; Tr. 2-16; Tr 94-99. Ms. Hopkins opined an opinion of value for the subject property of $768,830. Her opinion was revised, based up additional information as to cost to replace the subject property received after her initial analysis, to a fair market value of $308,212. Both the initial valuation and the revised valuation were based upon a cost less physical and economic depreciation following the methodology utilized by the Hearing Officer in the 2000 STC appeal. Ms. Hopkins also opined a value of $1,220, based upon a fair market value in exchange for the scrap value of the subject molds.

Respondent's Evidence

Respondent offered into evidence the following exhibits.

Exhibit 1  Written direct testimony of Michael G. Boynton, Director of Assessments, Jefferson County Assessor's Office.

Exhibit 2  Appraisal Report of Mr. Boynton on the subject property.

Exhibit 3  Affidavit of Nancy L. Hopkins filed in Appeal No. 00-34004, dated July 16, 2001.

Exhibit 4  Affidavit of Nancy L. Hopkins filed in Appeal No. 00-34004, dated August 20, 2001.

Exhibit 5  Pages 80-85, Valuing Machinery and Equipment: The Fundamentals of Appraising Machinery and Technical Assets, American Society of Appraisers, (2000).

Mr. Boynton arrived at an opinion of the fair market value for the subject property of $1,754,787. This opinion was arrived at by using the original cost less physical depreciation. Mr. Boynton testified under cross-examination, redirect and recross. Tr. 70-93.

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 1400 Old Highway 141, Fenton, Missouri. The property is owned by Complainant and is identified by Assessor's Account Number 143031. The property consists of P- 20 steel plastic injection molds used for casting various components of Simplicity, Riccar and Ultra Lite vacuum cleaners which are manufactured by Complainant. Specifically, the subject property consists of:

(1) twenty-five (25) molds acquired in April, 1997 - Group 1 Molds;

(2) fourteen (14) molds acquired during the year 2000 - Group 2 Molds; and

(3) five (5) molds included in Group 1 on which nine modifications were made during 2000.

There is a total of thirty-nine (39) actual molds. Exhibit D; 2000-Decision.

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 39 molds is approximately 61,000 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 D; 2000-Decision, Finding of Fact 3.

4. The vacuum cleaner models currently made from parts manufactured from the Group 1 and Group 2 molds will be discontinued by January 1, 2004. Exhibit B, Q & A 11; Tr. 95, Lines 10-15; Exhibit C, Q & A 15.

5. There is no market for the sale of the subject property as used molds. Exhibit 2, p. 4; 2000-Decision, Finding of Fact 4;.

6. The fair market value of the subject molds if sold as scrap metal would be $1,220.00. Exhibits D & E;

7. The original cost for the subject 25 molds, purchased in 1997, was $1,731,696. Exhibits D-D (attachments) & F, Exhibit 2, p. 9.

8. The original cost for the subject 14 molds, purchased in 2000, was $704,839. Exhibit D-E & Exhibit 2, p. 9.

9. The nine modifications to five of the 1997 - 25 molds add no value to the replacement cost new of the subject molds. The replacement cost new of any molds would include any such modifications. Exhibit B, Q & A 6-8.

10. The Principle of Substitution is a valuation principle, applicable to both real and personal property, that states that a prudent purchaser would pay no more for property than the cost of acquiring an equally desirable substitute on the open market. The Principle of Substitution presumes that the purchaser will consider the alternatives available and will act rationally or prudently on the basis of the information about those alternatives, and that reasonable time is available for the decision. See, Valuing Machinery and Equipment: The Fundamentals of Appraising Machinery and Technical Assets, American Society of Appraisers, (2000), p. 45; Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, (1984), p. 234; Appraising Machinery and Equipment, American Society of Appraisers, (1989), pp. 81-84; Property Appraisal and Assessment Administration, International Association of Assessing Officers, (1990), pp. 88, 332.

11. The replacement cost new for the molds in Group 1 and Group 2, as of January 1, 2001, was 28.9% of their original cost. Exhibit C, Q & A, 8-9; Exhibit B, Q & A, 1-5; Tr. 4, Line 13 - Tr. 15, Line 11; Exhibit G.

12. Replacement cost new for the Group 1 molds is calculated by utilizing the original cost ($1,731,696.00) and the 28.9% factor. This results in a replacement cost new amount of $500,460 ($1,731,696 x .289 = $500,460).

13. The total shots used through December 31, 2000, for the Group 1 molds was 1,999,250 out of 5,000,000 shots available. The total shots used through December 31, 2000, for the Group 3 modified molds was 102,759 our of 900,000 shots available. The combined total shots used was 2,102,009 out of a combined available of 5,900,000. The 25 Group 1 molds, including modifications, were .64.4% good (physical depreciation factor of 35.6%). Exhibits D-D & D-F; Exhibit 2, p. 9.

14. The replacement cost new less physical depreciation value for the Group 1 molds is $322,296 ($500,460 x .644 = $322,296.24).

15. The economic life of all twenty-five Group 1 molds is 6.75 years, since the models of vacuum cleaners that these molds will produce will be discontinued as of January, 2004. The molds were purchased in April, 1997. As of January 1, 2001, the molds were 3.75 years (44 months) old, with a total economic life, from date of purchase of 6.75 years (80 months). The economic obsolescence factor is 55% (44/80 = .55). The replacement cost new less physical depreciation and economic obsolescence is $145,033 ($322,296 x .55 = $177,263; $322,296 - $177,263 = $145,033).

16. Replacement cost new for the Group 2 molds is calculated by utilizing the original cost ($704,839.00) and the 28.9% factor. This results in a replacement cost new amount of $203,698 ($704,839 x .289 = $203,698.47).

17. The total shots used through December 31, 2000, for the Group 2 molds was 54,677 out of 2,800,000 shots available. The Group 2 molds were .98% good (physical depreciation factor of 2%). Exhibit D-E; Exhibit 2, p. 9.

18. The replacement cost new less physical depreciation value for the Group 2 molds is $199,624 ($203,698 x .98 = $199,624.04).

19. The economic life of the fourteen Group 2 molds is 3.5 years, since the models of vacuum cleaners that these molds will produce will be discontinued as of January, 2004. The molds were purchased in various months in 2000. As of January 1, 2001, the molds were .50 of a year (6 months) old, with a total economic life, from date of purchase of 3.5 years (42 months). The economic obsolescence factor is 14% (6/42 = 14.29, or 14%). The replacement cost new less physical depreciation and economic obsolescence is $145,033 ($199,624 x .14 = $27,947.36; $199,624 - $27,947 = $171,677).

20. The replacement cost new less physical depreciation and economic obsolescence for the Group 1 and Group 2 molds totals $316,710 ($145,033 + $171,677 = $316,710).

21. 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, 2001, to be $316,710, assessed value of $105,570 ($316,710/3 = $105,570).

22. Respondent's evidence was substantial enough to rebut the presumption of correct assessment by the Board, but was not persuasive enough to establish the value of the subject property to be $1,754,787 as proposed by Mr. Boynton's appraisal report - Exhibit 2.

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). There is no presumption that the assessor's valuation is correct. Section 138.431.3, RSMo.

The presumption in favor of the Board is not evidence. A presumption simply accepts something as true without any substantial proof to the contrary. In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor (which is not presumed to be correct), is accepted as true only until and so long as there is no substantial evidence to the contrary.

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice. Section 536.070(6), RSMo.

Courts will take judicial notice of their own records in the same cases. State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898). In addition, courts may take judicial notice of records in earlier cases when justice requires - Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894, transferred 167 S.W.2d 105 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929)) - or when it is necessary for a full understanding of the instant appeal. State ex rel. St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956).

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, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).

Market Value

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 is 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 each 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.

6. 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.

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.

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 Company v. STC, 436 S.W.2d 650 (Mo. 1968).

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 or 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 opinions 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. E.D. 1992).

Respondent's Burden of Proof

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, 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, Cupples-Hesse, Brooks, supra.

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, 2001. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 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).

Methods of Valuation

Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or construction) and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987) and State ex rel. State Highway Comm'n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

Valuation Factors and Methodology

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, 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 for a definite period since at the end of 2003 new models of vacuum cleaners will be introduced to replace the ones which can be manufactured by the subject molds. Even if the molds might still be able to make parts (take shots) after December, 2003, they will no longer have this functional use, since there is no practical economic benefit to making parts for vacuum cleaners which will no longer be produced and sold. Finding of Fact 4.

On the other hand, if the molds were to take the number of shots they are designed to take before the end of 2003, 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. From past history, no molds have reached the end of their physical life (taken the maximum number of shots) before a model change dictates the scrapping of molds. 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. See, 2000-Decision, pp. 16-17.

Complainant's appraiser employed the valuation methodology decided upon and utilized in the 2000 Decision and supported as an appropriate approach to value. That same methodology is likewise employed in reaching a determination of value for assessment purposes in this 2001 appeal. Respondent's appraiser elected to not utilized this methodology.

This Decision, like the 2000 Decision, recognizes that the value arrived at - replacement cost, less physical and economic obsolescence - does not equate to a market value since there is no market for used plastic injection molds. If a value based on a pure true value in money - fair market value (See, Conclusions of Law - Market Value, supra) - were to be placed on the subject property in this appeal, then the only value would be a scrap metal value.

In the limited and rare cases, like this, of unique or special items of personal property where no market data exists and where there is no market for the used special items, valuing the property utilizing replacement cost (where it can be determined) less physical, functional and economic obsolescence, where each is applicable, will provide a 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 (physical and economic) 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 a figure to be use for 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.

Complainant's Methodology Appropriate for Valuation

Complainant's methodology of arriving at replacement cost new, based upon actual market data of cost to replace the existing molds as of January 1, 2001, is the appropriate manner of arriving at replacement cost new when sufficient data exists to make this determination. In this instance such data was available. A deduction from replacement cost new for physical depreciation based upon number of shots taken as a percentage of total shots estimated to be available is likewise appropriate for this appraisal problem. Finally, making an allowance for economic obsolescence based upon the date when the existing vacuum cleaner models produced by the subject molds will be discontinued is also proper. Valuing Machinery and Equipment, pp. 105-107, supra.

Accordingly, the valuations calculated in Findings of Fact 11 - 21, supra, are supported by substantial and persuasive evidence on this record.

Failure to Utilize Replacement Cost New

Respondent's appraiser elected to value the molds based upon what he characterized as replacement cost new less physical depreciation. Exhibit 1, p. 9. This methodology was flawed to the extent that it did not establish the replacement cost new for the subject molds as of January 1, 2001. Instead it relied upon the original acquisition cost for the molds in 1997 and 2000 as the replacement cost. In light of the evidence that molds to replace the subject molds could be purchased for approximately 70% less than the original acquisition costs, the reliance on the original acquisition cost overstated the replacement cost of the molds. By only applying physical depreciation, as was done by Mr. Boynton, to the 2001 replacement cost, instead of original acquisition cost, would have resulted in an indicated value of only $521,920, before consideration of whether additional depreciation for economic obsolescence should be deducted. Therefore, Mr. Boynton's valuation of $1,754,787 as replacement cost new less physical depreciation, overstated the actual replacement cost new less physical depreciation by over $1.2 million dollars ($1,754,787 - $521,920 = $1,232,867).

Failure to Recognize Economic Obsolescence

The Boynton methodology contained an additional defect, in that it made no allowance for any economic obsolescence of the molds. The failure to account for any economic depreciation factor stemmed from Mr. Boynton's own opinion based upon a number of conclusions that he reached about the subject molds. Exhibit 1, Q & A 14 - 15; Exhibit 2, pp. 6-8. It is not necessary to analyze each of the fourteen points put forth by the appraiser and his testimony on these points.

The points of objection to making a downward adjustment for economic obsolescence can be summarized for purposes of this decision as there is no connection to consumer demand and the subject molds, which would establish that the cost to replace should be reduced by a depreciation factor for economic factors. Mr. Boynton also makes a point that the 4 - 5 year economic life utilized in the 2000 decision was not accurate, since the 1997 molds would have been retired by January 1, 2002, and such was not done.

The observations of Mr. Boynton are unpersuasive. As to his opinion that there is no connection between consumer demand for individual parts and the subject molds which make those parts, this simply is not supported by the evidence in this record. The testimony of Mr. Hamm established various instances in which because of consumer preference modifications to the vacuum cleaners have been made relative to individual parts. Modifications to account for customer preference relating to items such as wheels, fan duct cover, fan cover top, fan cover bottom, headlight, bumper, filtration system, and cord hooks clearly establish that customer preferences dictate design changes and modifications. Exhibit C, Q & A 10; Tr. 94, Line 10 - Tr. 96, Line 24.

The fact that nine modifications were made to five of the 1997 molds underscores the fact that consumer demand is a factor which is directly connected to the molds as a group. Simply stated the personal opinions of Mr. Boynton are unpersuasive because they are not based on any substantiating evidence. Complainant's evidence establishes that modifications and overall model changes occur which render the subject molds economically obsolete. To follow Mr. Boynton's reasoning to its logical conclusion would mean that if the molds for making plastic parts for the 1957 Edsel were in existence and they had only used up 25% of their total shots, that they would have to be valued at 25% of replacement cost new, even though not a single component made by such molds could be used for anything, due to consumer demand having put the Edsel to death over 40 years ago.

Period of Economic Life

Mr. Boynton's point on a 4 to 5 year economic life, as was relied upon in the 2000 decision is well taken to the extent that the evidence in this record will not support such a 4 to 5 year economic life. However, the evidence in the record of the 2000 appeal on a 4 to 5 year economic life was the only evidence in that record on that point, on which a decision could be rendered. The uncontroverted evidence on this record is that the current models made by the subject molds will be discontinued at the end of 2003. Therefore, their economic life is certain.

The evidentiary record for the 2000 appeal supported the 4 to 5 year life for the 25 molds purchased in 1997. In hindsight, a 6.75 year life for 2001 would have been appropriate. Had the evidence in the 2000 appeal established that the models made by the 25 molds would be discontinued as of December, 2003, then obviously the 6.75 year economic life would have been applied. At the same time, it must be recognized that the fourteen molds purchased in 2000 have only an approximate economic life of 3.5 years (6/00 - 12/03), due to model changes. If one applied a 6.75 economic life to the 1997 molds and a 3.5 economic life to the 2000 molds, the average economic life calculates to 5.6 years (25 x 6.75 = 168.75; 14 x 3.5 = 49.00; 168.75 + 49.00 = 217.75; 217.75/39 = 5.58, rounded to 5.6 years). This puts the over all economic life at just beyond a 5 year period, but significantly under a 7 year period.

In short, the decision as to applying economic depreciation in any given case must be based upon the evidence in the record. The 2000 evidence supported the 4 to 5 year life. The 2001 evidence establishes the 6.75 and a 3.5 year economic life. These figures are applied in this decision.

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 2001 is set at $105,570.

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 April 16, 2003.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Chief Hearing Officer