State Tax Commission of Missouri

 

JAMES BROWN,                                           )

)

Complainant,                )

)

v.                                                         )           Appeal Number 06-73005

)

ROBERT RAINES, ASSESSOR,                    )

MORGAN COUNTY, MISSOURI,               )

)

 Respondent.                )

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Morgan County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.  Hearing Officer finds true value in money for the subject property for tax year 2006 to be $18,505, assessed value of $3,520.

Complainant appeared pro se.

Respondent appeared pro se.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2006, under the economic conditions existing on January 1, 2005.

SUMMARY

Complainant appeals, on the ground of overvaluation, the decision of the Morgan County Board of Equalization, which sustained the valuation of the subject property.  The Assessor determined an appraised value of $22,100, assessed value of $4,390, as residential property.  Complainant proposed a value of $18,505, assessed value of $3,520.  A hearing was conducted on November 9, 2006, at the Morgan County Courthouse, Versailles, 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 offered into evidence Exhibit A – Settlement Statement dated 6/13/05 for purchase of the subject property by Complainant for $18,300.  Mr. Brown gave his opinion of value for the property to be $18,505, being the contract sales price plus settlement charges due from the buyer in the June 2005 sale.

Respondent’s Evidence

Respondent offered into evidence Exhibit 1 – Appraisal Report with supporting documents prepared by Respondent in support of the original valuation sustained by the Board.  Exhibit 1 was received into evidence.

FINDINGS OF FACT

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

2.         The subject property is Lot 1, Sunset Hills subdivision, Morgan County, Missouri.  The property is identified by parcel number 62-15-5-15-3-1-16.  The property consists of an irregular lot measuring 66.3 (lake frontage) x 61.7 x 50 x 55.8.

3.         There was no evidence of new construction and improvement from January 1, 2005, to January 1, 2006. 

4.         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, 2005, to be $18,505, as proposed.

CONCLUSIONS OF LAW AND DECISION

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.

Presumptions in Appeals

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).


The Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005).  Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

            The presumptions of correct assessment are rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property.  Snider, Hermel & Cupples Hesse, supra.  Complainant’s evidence met the standard of substantial and persuasive to rebut the presumptions of correct assessment by the Assessor and the Board and establish the true value in money.

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.  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.

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.

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, 2005.  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).  See also, 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).

Complainant met his burden of proof in this appeal.  The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).  The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.  Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).  The basis for the owner’s opinion in this appeal is his purchase of the property in June 2005.  The actual purchase price has probative value on the issue of fair market value.  The property had been listed with a realtor for a sale price of $23,500 to $24,000, prior to Complainant’s purchase.  There is no evidence which establishes that the June 2005 purchase was anything less than an open market transaction.  A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction.  Phoenix Redevelopment Corporation v. Walker, 812 S.W.2d, 881, 883-4 (Mo. App. W.D. 1991).

Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.  The actual sale price is a method that may be considered for estimating true value.  The actual sales price between a willing seller who is not obligated to sell and a willing buyer who is not compelled to buy establishes an outer limit on the value of real property.  St. Joe Minerals Corp. v. STC, 854 S.W.2d 526 (App. E.D. 1993).   The June 2005 purchase by law set the outer limit on the value of the property under appeal.  Respondent raised the issue of whether the subject property included a dock when it was purchased.  Complainant’s testimony was that he had not purchased the dock, although it was purchased later and affixed to the subject property.  However, it could not be established that this was done prior to January 1, 2006.  Therefore, the June 2005 purchase price is a proper foundation to support the owner’s opinion.

 

 

 

ORDER

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

The assessed value for the subject property for tax year 2006 is set at $3,520.

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 2000.

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 Morgan 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 21, 2006.

STATE TAX COMMISSION OF MISSOURI

 

 

 

_____________________________________

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 21st  day of November, 2006, to:    James Brown, 3259 Gillham Plaza, Kansas City, MO 64109, Complainant; Marvin Opie, Prosecuting Attorney, Morgan County Justice Center, Versailles, MO 65084, Attorney for Respondent; Robert Raines, Assessor, 100 East Newton, Versailles, MO 65084; Cathy Daniels, Clerk, 100 East Newton, Versailles, MO 65084; Clark Hunter, Collector, P.O. Box 315, Versailles, MO 65084.

 

 

___________________________

Barbara Heller

Legal Coordinator