State Tax Commission of Missouri

RICHARD & JENNY MANSFIELD, )

)

Complainants, )

)

v. ) Appeal Number 05-62506

)

DON DAVIS, ASSESSOR, )

JASPER COUNTY, MISSOURI, )

)

Respondent. )

DECISION AND ORDER

HOLDING

Decision of the Jasper County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED, true value in money for the subject property for tax years 2005 and 2006 set at $345,200, assessed value of $65,590.

Complainants appeared pro se.

Respondent appeared in person and by Counsel, Jared P. Stilley, Assistant Prosecuting Attorney.

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

ISSUE

The Commission takes this appeal to determine whether there was an intentional plan of discrimination or lack of uniform assessment of the subject property by the assessing officials for the 2005-2006 assessment cycle.

SUMMARY

Complainants appeal, on the ground of discrimination, the decision of the Jasper County Board of Equalization, which sustained the assessment of the subject property. The Assessor determined an appraised value of $$345,200 assessed value of $65,590, as residential property assessed at nineteen percent (19%) of its fair market value. Complainant proposed a fair market value of $300,000, but did not propose an assessed value to reflect any level of discrimination. A hearing was conducted on January 24, 2006, at the Jasper County Annex, Carthage, Missouri.

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

Complainants’ Evidence

Complainants offered into evidence Exhibit A. Exhibit A consists of (1) a three page sheet of assessment date compiled by Complainants on forty-two (42) properties located on Grand, Main, and Centennial streets in Carthage, Missouri; (2) photographs of ten (10) of the properties listed on the compilation of properties compiled by Complainants, with the address of each property and the assessed values for 2001, 2003 and 2005 for each property. (Exhibits 1 thru 10 of Exhibit A). Exhibit A was received into evidence.

Mr. Mansfield testified on behalf of Complainants. His testimony related to the fact that Complainant’s property had the highest assessed value of the forty-two properties listed in Exhibit A. He also noted that a number of the properties (27) had stayed the same from the 2003 to the 2005 assessment. Eleven of the properties had increased in value, although none had increased by as large of a percentage as the subject (7.12%). Four of the properties had gone down slightly in assessed value.

Complainant testified he had not idea what the subject property was worth but for purposes of the hearing proffered a fair market value of $300,000, with no supporting documentation for this value. Complainant presented to evidence to establish the assessment ratios of any of the properties listed in Exhibit A. Mr. Mansfield also testified as to the sale prices of four different properties and the values that the Assessor had on these properties, which were less than the sale prices testified to by Complainant. None of these properties were identified by address, sale date, or any other information to further identify the properties.

Respondent’s Evidence

Respondent Offered into evidence Exhibit 1. Exhibit 1 consisted of the property record cards on the subject and fifteen other properties located in Carthage and two locator maps for the subject and the other properties. Exhibit 1 was received into evidence.

Lisa Perry, Deputy Assessor testified on behalf Respondent. Ms. Perry testified that Exhibit 1 was information showing the ratio of assessed values of the fifteen properties as a ratio of sales prices. The properties had been divided into properties with high, target and low assessment. The witness had not calculated an average assessment ratio for Jasper County on residential property, nor an average assessment ratio on the fifteen properties presented in Exhibit 1.

FINDINGS OF FACT

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

2. The subject property is located at 1505 Grand Ave, Carthage, Missouri. The property is identified by locator number 14-2.0-09-10-023-03-.000. The property consists of a 100 by 200 foot lot, improved by a one-story single-family residence built in 1992 with 3,807 square feet of living area. Exhibit 1.

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

4. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish discrimination in the assessment of the subject property or a lack of uniform assessment in Jasper County.

5. The assessment data in Exhibit 1 established an average assessment ratio in relation to the sales prices of the individual properties of .201% or a variance of only .0021% from the statutory ratio of .19%. Calculations by the Hearing Officer from Exhibit 1.

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.

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).

Presumption on Assessor’s Value

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).

Rebutting of Presumption of Correct Assessment

In a discrimination case, the presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor’s or Board’s assessment is erroneous and what the assessed value should have been placed on the property. Snider, Hermel & Cupples Hesse, supra.

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 are 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.

Substantial and Persuasive Evidence

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).

Owner’s Opinion of Value

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).

Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property on January 1, 2005. Koplar v. State Tax Commission, 321 S.W.2d 686, 690 (Mo. 1959); and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction. Koplar, supra, at 695. Evidence of value and assessments of a few properties does not prove discrimination. Substantial evidence must show that all other property in the same class, generally, is actually undervalued. State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964). The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986). No other methodology is sufficient to establish discrimination. Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696 (Mo. 1958).

Complainants failed to prove that their property was being assessed at a ratio greater than 19% as provided for by statute. Section 137.115.5(1), RSMo. The owner’s opinion of $300,000 tendered in this appeal was only offered after the Mr. Mansfield admitted he had no idea of the fair market value of the property on January 1, 2005. No documentation in the form of a recent appraisal of the property was offered to support the opinion of value of $300,000. No explanation of how this opinion of value was determined by Mr. Mansfield was provided. Therefore, the opinion of fair market value of $300,000 has no probative weight or value, since it was not established to be founded upon proper appraisal elements or a proper appraisal foundation.

Had Complainants established that $300,000 was the fair market value of the subject property, then the assessment ratio on their property would have been 21.9% ($65,590 - assessed value - /$300,000 = .219) instead of 19%. However, this would have been corrected by simply changing the assessed value to $57,000 ($300,000 x. .19 = $57,000). The presumption of a correct valuation of the subject property by the Assessor and the Board was not rebutted by Complainants. Therefore, the assessed value of $65,590 correctly reflected the assessed value at the residential assessment ratio of 19%.

In order to establish a lack of uniform assessment – discrimination, Complainants had to establish the average level of assessment for residential property in Jasper County for 2005. This has to be done by (a) independently determining the market value of a representative sample of residential properties in Jasper County; (b) determining the assessed value placed on the property by the assessor’s office for 2005; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results. The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in Jasper County would have to demonstrate a disparity that is grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).

The testimony of Mr. Mansfield and the data presented in Exhibit A fail in any measure to establish the assessment ratio for any of the forty-two properties listed. Complainants’ claim of lack of uniform assessment rests upon the fact that some properties did not increase in value, some decreased and some increased. There is no citation to any statutory or case law on discrimination which establishes that simply because some properties increased in value and other didn’t in a given assessment cycle that failure of uniform assessment has occurred. Complainants failed to establish that any of the properties listed in Exhibit A were assessed for the 2005 assessment cycle at less than 19% or more particularly that the average assessment ratio for the forty-two properties was only 16.6% which would be the assessment ratio if the subject’s assessed value was reduced to $57,000 ($57,000/$345,200 – fair market value = .166).

The forty-two properties were not demonstrated to be a statistically significant and representative sample of residential properties in Jasper County, notwithstanding the failure to establish any assessment ratio other than 19% for these properties. In the absence of substantial and persuasive evidence to the contrary, the presumptions of correct assessment on these properties were not rebutted and it must therefore be presumed they were assessed at 19% of fair market value. Although Respondent’s sales ratio data also suffers from not being a statistically significant and representative sample from the entire county (although it most likely would be for the city of Carthage or at least the subject’s larger neighborhood), the data established an average assessment ratio of 20.1% of actual sales price. This is well within an acceptable range to meet the statutory assessment ratio of 19%. Therefore, in comparison to the only sales ratio data provided in this record, Complainants’ property is not the subject of a discriminatory assessment.

Complainants failed to establish that their property was being assessed at a ratio to fair market value that was greater than the statutory assessment ratio of 19% or the average residential assessment ratio for Jasper County. Therefore, the assessment established by the Assessor and sustained by the Board must be affirmed.

ORDER

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

The assessed value for the subject property for tax years 2005 and 2006 is set at $65,590.

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 Jasper 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 February 3, 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 3^rd day of February, 2006, to: Richard Mansfield, 1515 Grand Ave., Carthage, MO 64836, Complainant; Jared Stilley, Assistant Prosecuting Attorney, 601 Pearl, Room 100, Joplin, MO 64801, Attorney for Respondent; Donald Davis, Assessor, 302 S. Main Street, Carthage, MO 64836; Ron Mosbaugh, Clerk; Stephen Holt, Collector, Jasper County Courthouse, Carthage, MO 64836.

___________________________

Barbara Heller

Legal Coordinator