State
Tax Commission of Missouri
JEFFREY R. PURTELL, )
)
Complainant, )
)
v. ) Appeal Number 05-73011
)
ROBERT RAINES, ASSESSOR, )
)
Respondent. )
DECISION AND ORDER
HOLDING
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 $115,500, assessed value of $15,950 ($5,670 – Res + $10,280 – Ag = $15,950).
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, 2005.
SUMMARY
Complainant
appeals, on the ground of overvaluation, the assessment by the Assessor. The Assessor determined an appraised value of
$298,900 (assessed value of $56,790, as residential and agricultural
property). Complainant proposed a
value of $115,500. A hearing was
conducted on January 10, 2006, at the Morgan County Courthouse,
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 Exhibits A, B and C.
Exhibit A consisted of the assessment notice, tax bills and a valuation
formula on the subject property. Exhibit
B consisted of sales documents on the property.
Exhibit C consisted of a series of photographs taken from the subject
property at an elevation of 818 feet above sea level looking toward the Lake of
the Ozarks and another series of photographs taken from the subject property at
an elevation of 156 feel above sea level looking toward the
Complainant
testified as to his purchase of the subject property in July 2004 for
$115,500. He also testified as to the
fact that the subject property is landlocked, with no access for ingress or
egress, other than from the
Respondent’s
Evidence
Respondent offered into evidence Exhibit 1 – a valuation report on the subject property. Respondent used three sales of property he deemed to be comparable to the subject. Based upon these three sales, Respondent determined that the value of $298,900 was representative of fair market value. Respondent believed that because the prior owners did not reside in the area that they were not knowledgeable sellers and that therefore the July 2004 sale of the property at $115,500 was not an arm’s-length or market transaction.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. See, CONCLUSION OF LAW AND DECISION, Jurisdiction.
2. The subject property is located on the
Lake of the Ozarks,
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 Assessor and establish the true value in money as of January 1, 2005, to be $115,500.
5. The subject property sold in an arms-length, open market transaction in July, 2004 for a contract price of $115,500. The sale in July 2004 was at a time relevant for a valuation as of January 1, 2005. The sale price of $115,500 sets the outer limit of the fair market value of the property for January 1, 2005. The property fronts on the lake, but has an extremely steep bluff dominating the entirety of the lake frontage of the property. The property is land locked. The topography and land locked condition of the property are both negative factors influencing the fair market value of the property.
6. The per acre value of the subject property is $3,850 ($115,500/30 = $3,850). The residential portion of the subject has a fair market value of $29,940 ($3,850 x 7.75 = $29,837.50, rounded to $29,840). The agricultural portion of the subject has a fair market value of $85,660 ($115,500 - $29,840 = $85,660).
7. The residential assessed value is $5,670 ($29,840 x .19 = $5,669, rounded to $5,670). The agricultural assessed value is $10,280 ($85,660 x .12 = $10,279, rounded to $10,280). The total assessed value is $15,950 ($5,670 + $10,280 = $15,950).
CONCLUSIONS
OF LAW
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.
Complainant’s testimony established that he did not receive notification of his right to go to the Board of Equalization until after the Board had closed for the 2005 assessment cycle. The Notice of Change of Assessed Value, dated May 15, 2005 (Exhibit A) does not contain any notification of either the taxpayer’s right to appeal to the Board of Equalization or the time by which such an appeal must be filed. The Notice did invite the taxpayer to call or visit the assessor to talk about the assessment. Complainant took advantage of this invitation on or about June 15, 2005, when the Assessor was contacted by phone. This was followed by a written communication to the Assessor on June 20, 2005.
Complainant testified that during none of these contacts was he advised that he should file an appeal with the Board. On October 12, 2005, after no response from the Assessor, Complainant finally was advised by the Assessor he should contact the Commission and was provided the phone number by Mr. Raines. Attachments to Complaint for Review of Assessment. The Assessor did testify that he felt that he would have advised Complainant of his need to appeal to the Board, but he had no specific recollection of this. Nor did the Assessor file a motion to dismiss for failure to pursue and exhaust administrative remedies.
The Notice of Change specifically referenced that if a taxpayer had documentation that “the property has sold recently indicating a value lower than my appraisal,” that such evidence should be provided to the Assessor. Complainant did provide such evidence of the July 2004 sale of the subject. Complainant assumed that based upon the actual sale and the language of the notice that the Assessor would make an adjustment reducing the value of the subject property.
There being no conclusive evidence to the contrary, the Complainant’s testimony is sufficient to establish that the failure to appeal to the Board was reasonably due to a reliance on the actions of the Assessor, by which Complainant was lead to believe that because of the actual sale of the property that the valuation of the property would be adjusted.
Where as in this
instance a taxpayer has reasonably relied upon actions by the assessor and has
not received notice of his right to appeal to the Board of Equalization the
Commission has jurisdiction to hear this appeal and render a decision on the
issue of fair market 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 (
Rebutting
of Presumption of Correct Assessment
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 is erroneous and what the fair market 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 (
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.
Proper
methods of valuation and assessment of property are delegated to the
Commission. It is within the purview of
the Hearing Officer to determine the method of valuation to be adopted in a
given case. See, Nance v. STC, 18
S.W.3d 611, at 615 (Mo. App. W.D., 2000); Hermel, supra; Xerox Corp. v. STC, 529 S.W.2d 413 (
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 (
The owner of
property is generally held competent to testify to its reasonable market value.
Boten v. Brecklein, 452 S.W.2d 86, 95 (
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 holding in St. Joe Minerals controls the valuation of Complainant’s property. The actual sale of the property set the outer limit of value. The evidence established that this was a sale between a willing seller and willing buyer at a time relevant to the assessment date. Respondent’s argument that the sellers were not well informed or knowledgeable about the value of the subject at the time of sale because the sellers did not live in the area is not persuasive. The property had been listed for sale for at least 20 years and no offers had been made. At the time of Complainant’s purchase the property was listed with a local realtor. The local realtor would no doubt have sufficient knowledge as to the market value of land such as the subject. The property was listed for $140,000 and this record establishes that Complainant’s offer was the only offer made. The owner’s opinion of fair market value is founded upon a proper foundation, the actual purchase of the property in an open market transaction. This constitutes substantial and persuasive evidence to establish fair market value.
ORDER
The assessed
valuation for the subject property as determined by the Assessor for
The assessed value for the subject property for tax years 2005 and 2006 is set at $15,950 ($5,670 – Res + $10,280 – Ag = $15,950).
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 January 20, 2006.
STATE TAX COMMISSION OF
_____________________________________
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 20th day of January, 2006, to: Jeffrey Purtell, P.O. Box 6098, Bloomingdale, IL 60108-6098, Complainant; Marvin Opie, Prosecuting Attorney, Morgan County Justice Center, 211 E. Newton, Versailles, MO 65084, Attorney for Respondent; Robert Raines, Assessor, 100 E. Newton, Versailles, MO 65084; Cathy Daniels, Clerk, 100 E. Newton, Versailles, MO 65084; Clark Hunter, Collector, P.O. Box 315, Versailles, MO 65084.
___________________________
Barbara Heller
Legal Coordinator