State Tax Commission of
PAUL & JANICE MILES[i], )
)
Complainants, )
)
v. ) Appeal Number 05-30005
)
MICHAEL O’FLAHERTY, )
DIRECTOR OF ASSESSMENT, )
)
Respondent. )
DECISION AND ORDER
HOLDING
The decision of the Board of Equalization, setting value at $130,000 (assessed value $24,700) is SET ASIDE. Value is set at $113,000 (assessed value $21,470) as proposed by Respondent at hearing.
ISSUE
The issue in this case is the true value in money of a residential property.
SUMMARY
The subject property
is a residential property with a two car detached garage which was originally
valued by the assessor at $133,100 (assessed value $25,290). Upon appeal, the Board of Equalization reduced
value to $130,000 (assessed value $24,700).
Complainants appealed asserting a value of $80,000 (assessed value $15,200). At hearing, Respondent proposed a value of
$113,000 (assessed value $21,470). An
evidentiary hearing was held on
EXHIBITS
The following exhibits were entered into the record:
Complainants’ Exhibits
Exhibit A – Statement and Pictures
Respondent’s Exhibits
Exhibit 1 – Appraisal Report
FINDINGS OF FACT
1. Jurisdiction is proper. Complainants timely filed their appeal from the decision of the Jackson County Board of Equalization.
2. The subject property is an 8286 square
foot lot improved with a two and one half story single-family residence with an
actual age of 97 years and an effective age of 30 years. The property is identified as parcel number
29-820-15-22-00-0-00.000, more commonly known as 3026 McGee Street,
3. The subject property is of average quality construction and is in fair condition for the neighborhood. The brick bay on the south side is pulling away from the house. The fascia boards are broken and appear to be rotting in places. Some of the gutters and downspouts are missing. The exterior siding and trim are in need of paint. The front porch floor is cracked in places from settlement and the interior has not been remodeled or updated. Complainants report that there are a number of vacant properties in the area; that the area has experienced drug problems in the past; and that the home is located in close proximity to a television tower and is damaged during the winter when ice falls from the tower. Respondent’s appraiser examined the home and neighborhood and confirmed Complainants’ reports of deferred maintenance and some vacant homes in the neighborhood. He could not, however, verify that the subject neighborhood suffered from a higher than normal drug activity.
4. Respondent’s appraiser found sales of three similar
properties which sold for $143,500, $120,000 and $115,000. The first comparable was in the subject
property’s immediate vicinity. The other
two properties were under a mile away from the subject property. The comparable sales sold between March of
2004 and November of 2004. The homes
were between 101 years old and 116 years old.
Respondent’s appraiser adjusted for square footage, quality of
construction, condition and site improvements.
After adjustments, these properties indicated a range of value for the
subject property between $108,385 and $123,770.
Based upon these sales, Respondent’s appraiser determined a market value
for the subject property of $113,000 on
5. Complainants presented no appraisal
report but testified that a property at
3007 McGee had sold for about $50,000 about two years prior to the tax
day. They also testified that a property
across the street from them had sold for $140,000. Both properties were smaller than the
subject. The property across the street
was in better condition. Complainants’
testimony, standing alone, is not sufficient to demonstrate that the market value
of their home on
6. No evidence was presented which
suggested that any new construction or property improvements occurred between
8. The true value in money for the subject
property on
January 1, 2006, is $113,000 (assessed value $21,470), as proposed by Respondent at hearing.
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 (
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 (
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 (
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
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] (
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 (
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 (
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 (
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 (
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 (
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 (
DISCUSSION
In order to prevail on a claim of overvaluation, Complainants must present an opinion of value and then present substantial and persuasive evidence tending to demonstrate that their opinion of value is supported by market evidence. Complainants have failed to meet this burden of proof. However, it is clear that the assessing authorities have recognized the deficiencies in Complainants’ property and neighborhood and have taken steps to account for those issues in their determination of value. County officials have found market data which supports lowering the appraised value of the subject property to $113,000.
ORDER
The assessed value determined by the Board of Equalization, is SET ASIDE. The Clerk is hereby ordered to place a new value of $113,000 (assessed value $21,470) on the subject property for tax years 2005 and 2006.
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 Jackson 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 29, 2006.
STATE TAX COMMISSION OF
_____________________________________
Luann Johnson
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid this 29th day of March, 2006, to: Paul Miles, 3026 McGee Street, Kansas City, MO 64108, Complainant; William Snyder, Deputy County Counselor, Jackson County Courthouse, 415 E. 12th Street, Room 200, Kansas City, MO 64106, Attorney for Respondent; Michael O’Flaherty, Director of Assessment; Mary Jo Spino, Clerk; Mike Pendergast, Director of Collections, Jackson County Courthouse, 415 E. 12th Street, Kansas City, MO 64106; and Bob Ensminger, Real Estate Records, City of Kansas City, 1st Floor, City Hall, 414 E. 12th Street, Kansas City, MO 64106.
_______________________________
Barbara Heller
Legal Coordinator