State Tax Commission of Missouri

ELDON D. HARRIS, )

)

Complainant, )

)

v. ) Appeal Number 05-53000

)

KERRY SUMMERS, ASSESSOR, )

CRAWFORD COUNTY, MISSOURI, )

)

Respondent. )

Decision of the Crawford 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 years 2005 and 2006 to be $53,400 ($38,700 - Residential, $14,700 - Agricultural) $9,125, ($7,360 - Residential, $1,765 - Agricultural).

Respondent appeared by Counsel, Sid Pearson, Prosecuting Attorney and in person.

The Commission takes this appeal to determine the classification of three (3) acres of land classified as residential by the Assessor.

Complainant appeals, on the ground of misclassification, the decision of the Crawford County Board of Equalization, which sustained the valuation of the subject property. The Assessor determined an appraised value of $60,400 ($46,210 - Residential, assessed value of $8,780, and $10,480 - Agricultural value, assessed value of $1,700). Complainant did not challenge the valuation placed on the residential or agricultural portions of the property, but only challenged the assessment of three acres as residential land. A hearing was conducted on

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

Exhibit A - Newspaper Article on Complainant's appeal before the Board of Equalization.

Exhibit D - Copy of page 2 of Property Reassessment and Taxation, State Tax Commission pamphlet.

Exhibit E - Copy of page 10 of Property Reassessment and Taxation, State Tax Commission pamphlet.

Exhibit G - Photographs of the subject house, yard, fencing and agricultural buildings.

The exhibits were received into evidence without objection. Complainant testified in his own behalf.

Respondent offered into evidence Exhibit 1, a statement as to the basis for the Assessor's classification of the three acres in dispute and a copy of the property record card on the subject. Respondent testified as to his classification of the subject property and his utilization of a 3 acre rule for residential property on rural land in Crawford County.

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

2. The subject property is located at 3785 Springfield Road, Bourbon, Missouri, Missouri. The property is identified by locator number 07-3.2-07-0-00-002.00. The property consists of 38.8 acres, upon which are constructed various residential and agricultural improvements.

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 correct classification of 2.5 acres to be agricultural. Testimony of Complainant; Exhibit G.

5. Respondent classified three (3) acres as residential and valued it at $3,000 per acre. Complainant contested the classification of 2.5 acres as residential and asserted this acreage was actually used for agricultural purposes and should be reclassified and be given an agricultural grade of 5 - $195 per acre.

6. The yard and house on the subject occupy a lot of approximately 150 by 150 feet or a half acre more or less. The actual use for the remaining 38.3 acres is agricultural. Testimony of Complainant; Testimony of Respondent.

7. The correct classification for .50 of an acre is residential with a value of $1,500. The residential value of the subject is $38,700 ($46,200 - $7,500 = $38,700), calculated by subtracting the residential value for 2.5 acres from the Assessor/Board's total appraised residential value. The residential assessed value is $7,360 ($38,700 x .19 = $7,353, rounded to $7,360).

8. The correct classification for 38.30 acres is agricultural. The agricultural value of the subject is $14,700 ($14,200 + 487.50 = $14,687.50, rounded to $14,700), calculated by adding the agricultural land grade of $195 per acre for 2.5 acres to the Assessor/Board's total appraised agricultural value. The agricultural assessed value is $1,765 ($14,700 x .12 = $1,764, rounded to $1,765).

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.

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 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 and classification determined by the Board, even if simply to sustain the value made by the Assessor is accepted as true only until and so long as there is no substantial evidence to the contrary.

The Supreme Court of Missouri has held, "A tax assessor's valuation is presumed correct." Donna Snider v. Casino Aztar/Aztar Missouri Gaming Corp., SC86181, 3/01/2005. Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor's or Board's valuation or classification is erroneous and what the fair market value or correct classification should have been for the property. Snider, Hermel & Cupples Hesse, supra. This standard has been met in the present appeal. The single undisputed and material fact in this appeal is that all but approximately one half acre of the subject property is utilized as agricultural land. Only approximately a half acre is devoted to a residential use. Complainant testified to this. Respondent did not dispute it. Respondent concurred approximately a half acre around the subject house was fenced.

In order to be uniform and equal in his assessment of rural tracts of land which are of a mixed residential and agricultural use, the Assessor employed a three acre residential rule. This was based upon state regulations which require three acres to properly install and maintain a sewer or septic system. On the side of uniformity and equality of assessment this is a reasonable approach in attempting to allocate between residential and agricultural use when performing the mass appraisal of property under a general reassessment in the county. The Assessor cannot be faulted in this regard.

Nevertheless, once an individual land owner comes forward and demonstrates that less than three acres are actually being used for a residential purpose it is appropriate for the Assessor or the Board to reclassify the property to correctly reflect the acreage which is actually devoted to a residential use and that which is utilized for residential use. In the present case, because the house and yard are actually fenced and Complainant's cattle operation with fencing and corral comes up to the yard fence (or the cattle fence when viewed from the other side) this property can easily be classified according to these actual uses.

The actual use of property controls its classification in a case such as this. See, Section 137.016.1(1) & (2) Residential and Agricultural use of real property. Since only a half acre was utilized for a residential purpose and the remaining 38.30 acres were actually used for an agricultural purpose, as a matter of law, the classification of the subject property must reflect this mixed use. Only a half acre can be classified as residential. The remaining acreage must be classified as agricultural and valued in accordance with the appropriate agricultural land grades which grading was not in dispute.

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

The assessed value for the subject property for tax years 2005 and 2006 is set at $9,125, ($7,360 - Residential, $1,765 - Agricultural)..

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 Crawford 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.