State Tax Commission of Missouri

 

EMMA HUNT,                                               )

                                                                        )

                                    Complainant,                )

                                                                        )

            v.                                                         )           Appeal Number 05-80501

                                                                        )

PAUL ROUSE, ASSESSOR,                          )

PUTNAM COUNTY, MISSOURI                 )

                                                                        )

                                    Respondent.                 )

 

DECISION AND ORDER

 

HOLDING

            The decision of the assessor, approved by the Board of Equalization, setting value at $76,150 (assessed value $14,470) is AFFIRMED.

ISSUE

            The issue in this case is the true market value of a lake front lot.

SUMMARY

            The subject property is a lakefront lot which was originally valued by the assessor at $76,150 (assessed value $14,470).  Upon appeal, the Board of Equalization sustained the assessor’s value.  Complainant appeals asserting a value of $58,000 (assessed value $11,020).

            An evidentiary hearing was held on November 29, 2005, in the Putnam County Courthouse before senior hearing officer Luann Johnson.  Complainant appeared by William Phillips, Esq.  Respondent appeared pro se.

EXHIBITS

            The following exhibits were entered into the record:

Complainants’ Exhibits

            Exhibit 1 – Appraisal report of  Margaret Minear

Respondent’s Exhibits

            Exhibit A –  Land Study Lakefront and Off Water

            Exhibit B – Reference

            Exhibit C – Letter of Transmittal Page 1

            Exhibit D – Letter of Transmittal Page 2

            Exhibit E – Property Record Card – Phillips

            Exhibit F – Sales Letters

            Exhibit G – Property Record Card – Hunt

FINDINGS OF FACT

            1.         Jurisdiction is proper.  Complainant timely filed her appeal from the decision of the Putnam County Board of Equalization.

            2.         The subject property is a 21,111 square foot lake front lot with an effective front footage of 150.11 and actual front footage of 180.80.   Ex. G.  The property is identified as parcel number 001+11051500400317 more commonly known as 13105 Linden Lane, Unionville, Missouri.  Ex. G.   

            3.         Valuing lakefront lots by front foot is a recognized method of determining value. 

Property Assessment Valuation, International Association of Assessing Officials, 1977, pg. 84-85.   A land study conducted at Lake Thunderhead determined that lake front land sold for $600 per front foot.  Tr. 49.  The subject property has 180.80 feet of actual front footage and 150.11 feet of effective front footage for an indicated land value of $90,068.  This value was further adjusted downward by $13,500 for an indicated value of $76,150.  Ex. G.    Respondent did not testify as to what caused the additional downward adjustment.  Lots were examined by vehicle and also on foot to determine view and whether lots should be categorized as being in a cove requiring a lesser value.  Tr. 49-50.  Recommendations were made for adjustments for accessibility and topographical issues.  Tr. 50.

            4.         Complainant’s appraiser looked at the sales of three lots to determine her opinion of value.  Those lots sold for $84,000, $75,000 and $124,000 and required adjustments of 12.1%, 30% and 101.2% in order to make them comparable to the subject lot.  Ex. 1.  Complainant’s appraiser did not calculate the effective front footage of the lots.  Complainant’s appraiser’s comparables are not sufficiently similar to the subject lot to support a value for the subject lot of $58,000.

5.         Complainant’s broker testified that she would place the value of the subject lot at $59,000 to $61,000 but also indicated that lake front lots were selling for $90,000 in 2004 and for $70,000 to $75,000 in 2005.  Tr. 28, 30. 81.   Said broker further testified that “In my opinion, you don’t have any two lots at the lake that are—that are very much alike.”  Tr. 24.   She indicated that her firm had as many listings on the south end of the lake as the north end of the lake.  Tr. 31.  She further indicated that she believed the drop in lot value was due to the increase in property taxes.  Tr. 32.  Complainant’s broker’s testimony of actual sales prices of water front lots tends to support Respondent’s opinion of value.

            6.         Complainant’s evidence is not substantial and persuasive to establish that Respondent had overvalued Complainant’s property.

            7.         No evidence was presented which suggested that any new construction or property improvements occurred between January 1, 2005, and the hearing date.  Therefore the value determined for tax year 2005 shall also be the value determined for tax year 2006.

            8.         The true value in money for the subject property on January 1, 2005, and

January 1, 2006, is $76,150, as determined by the assessor and approved by the Board of Equalization.

CONCLUSIONS OF LAW

 

Highest and Best Use

 

            True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.  Aspenhof Corp. v. State Tax Commission, 789 S.W.2d 867, 869 (Mo. App. 1990).

            It is true that property can only be valued according to a use to which the property is readily available.  But this does not mean that in order for a specific use to be the highest and best use for calculating the property’s true value in money, that particular use must be available to anyone deciding to purchase the property. . . .A determination of the true value in money cannot reject the property’s highest and best use and value the property at a lesser economic use of the property.  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d. 341, 348-349 (Mo. 2005). 

True Value in Money

            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 purchased by one who is desiring 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).

Taxpayer has Burden of Proof

            In Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003), the court of appeals stated:

            There is no longer an automatic presumption regarding the correctness of an assessor's valuation. Section 138.431.3. This statutory change from the previous situation in which the assessor's valuation was presumed to be correct does not mean that there is now a presumption in favor of taxpayer. The taxpayer in a Commission tax appeal still bears the burden of proof and must show by a preponderance of the evidence that the property was improperly classified or valued. Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App.1991).

            In Reeves v. Snider, 115 S.W.3d 375 ( Mo. App. S.D. 2003), the court of appeals described the taxpayer's burden as follows:

            Taxpayers were the moving parties seeking affirmative relief, and as such, they bore the burden of proving the vital elements of their case, i.e., the assessments were "unlawful, unfair, improper, arbitrary or capricious.” Cupples Hesse Corp. v. State Tax Comm'n, 329 S.W.2d 696, 702 (Mo.1959); Westwood P'ship v. Gogarty, 103 S.W.3d 152, 161[8] (Mo. App. 2003); 84 C.J.S. Taxation §§710, 726. This is true regardless of the existence or non-existence of the challenged presumption. As the Supreme Court of Missouri explained, "even were we to hold that it [the presumption] has been overcome, the burden of proof on the facts and inferences would still remain on petitioner, for it is the moving party seeking affirmative relief.”  Cupples, 329 S.W.2d at 702[16]. See also 84 C.J.S. Taxation §710, which states: "Even where there is no presumption in favor of the assessor's ruling, if no evidence is offered in support of the complaint, the reviewing board is justified in fixing the valuation complained of in the amount assessed by the assessor."
            To prevail, Taxpayers had to "present an opinion of market value and then ... present substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on tax day." Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002).

Substantial and Persuasive Evidence

            Substantial evidence is that evidence which, if true, has probative force upon the issues, i.e., evidence favoring facts which are such that reasonable men may differ as to whether it established them, and from which the Commission can reasonably decide an appeal on the factual issues.  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).

Comparable Sales Approach

            The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.  Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.  This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data is available to make a comparative analysis.  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d. 341, 347-348 (Mo. 2005). (citations omitted).

Experts

            An expert’s opinion must be founded upon substantial information, not mere conjecture or speculation, and there must be a rational basis for the opinion.  Missouri Pipeline Co. v. Wilmes, 898 S.W.2d 682, 687 (Mo. App. E.D. 1995).  The state tax commission cannot ignore a lack of support in the evidence for adjustments made by the expert witnesses in the application of a particular valuation approach.  Drey v. State Tax Commission, 345 S.W.2d 228, 234-236 (Mo. 1961), Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d. 341, 348 (Mo. 2005).

            The testimony of an expert is to be considered like any other testimony, is to be tried by the same test, and receives just so much weight and credit as the trier of fact may deem it entitled to when viewed in connection with all other circumstances.  The hearing officer, as the trier of fact, has the authority to weigh the evidence and 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 may accept it in part or reject it in part.  Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. 1981); Scanlon v. Kansas City, 28 S.W.2d 84, 95 (Mo. 1930).

DISCUSSION

            Complainant asserts that a fee appraisal is a more reliable method of determining value than mass appraisal.  Such a generalization fails to address the ability of mass appraisals to be accurate and the ability of fee appraisals to be inaccurate.  A mass appraisal can be accurate because it can look at a larger amount of objective data to determine factors such as the front foot selling price of lake lots in a particular area.  Likewise, a fee appraisal which must use substantially dissimilar properties as comparables has a lower probability of accuracy.  Complainant has failed to meet her burden of proof.

ORDER

            The assessed value determined by the Assessor and approved by the Board of Equalization, is AFFIRMED. 

            A party may file with the Commission an application for review of a hearing officer decision within thirty (30) days of the mailing of such decision.  The application shall contain specific detailed 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.

            If an application for review of a hearing officer 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 Putnam 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 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 March 23, 2006.

STATE TAX COMMISSION OF MISSOURI

 

_____________________________________

Luann Johnson

Senior Hearing Officer

 

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid this 23rd day of March, 2006, to:  N. William Phillips, 103 North Market, P.O. Box 69, Milan, MO 63556-0069, Attorney for Complainant; James Garrett, Prosecuting Attorney, 1702 W. Main, Unionville, MO 63565, Attorney for Respondent; Paul Rouse, Assessor, Putnam County Courthouse, Room 201, Unionville, MO 63565-1600; Sue Ann Varner, Clerk, Putnam County Courthouse, Unionville, MO 63565; Sharon Thompson Parks, Treasurer & ex officio Collector, Putnam County Courthouse, Room 200Unionville, MO 63565.

 

 

 

_______________________________

Barbara Heller

Legal Coordinator