State Tax Commission of Missouri

 

C.W. LUEBBERT IRREVOCABLE                )

            FAMILY TRUST                                )

                                                                        )

                        Complainant,                            )

                                                                        ) 

            v.                                                         )           Appeal Number 05-30156

                                                                        )

MICHAEL O’FLAHERTY,                             )

DIRECTOR OF ASSESSMENT,                    )

JACKSON COUNTY, MISSOURI,               )

                                                                        )

                        Respondent.                             )

 

 

DECISION AND ORDER

 

HOLDING

 

            The subject appeal involves a mini-storage facility in Jackson County, Missouri.  The assessor originally valued the subject property at $1,480,050 (assessed value $473,620).  The Jackson County Board of Equalization raised value to $1,600,000 (assessed value $512,000).  Complainant appealed asserting a value of $1,000,000 ($320,000) and subsequently proposed a value of $850,000 (assessed value $272,000).

            Complainant failed to present substantial and persuasive evidence tending to demonstrate that the property was overvalued for tax years 2005 and 2006.  Consequently we find that the correct value for the subject property on January 1, 2005, and January 1, 2006, was $1,600,000 (assessed value $512,000) as determined by the Jackson County Board of Equalization.

ISSUE

            The only issue before the Commission is the true value in money of the subject property on January 1, 2005, and January 1, 2006.

EXHIBITS

Complainant’s Evidence

            Complainant filed the following Exhibits:

            A – Cash Revenue less Cash Expenses, 2003, 2004 and projected 2005

            B – 2005 BOE Appeal information

            C – Appeal to BOE for 2005

            D – BOE Income and Sales supporting BOE value

            E – Picture of Subject Property

            F – Comparative Trial Balance, The Lock Box Corporation

            G – Letter from Mike O’Dell, Infinity Reality

            H – Written Direct Testimony of Charles Luebbert

Respondent’s Evidence

            Respondent filed no evidence.

            At Complainant’s request, the case is decided upon evidence submitted.

FINDINGS OF FACT

1.         Jurisdiction is proper.  Complainant timely filed its appeal from the Jackson County Board of Equalization.

            2.         The subject property is an approximately 4 acre site improved with a 315 unit mini-storage facility identified as parcel number 54300-02-21-00-0-00-000, more commonly known as 8408 South 7 Highway, Blue Springs, Jackson County, Missouri.

            3.         The Board of Equalization estimated a net operating income of $219,960 with a capitalization rate of 10.5%, an effective tax rate of 3.1% and an indicated value of $1,617,352, or $20.21 per square foot, under the income approach. Exhibit D.  The Board of Equalization also found three comparable sales, selling in August and September 2004, indicating a range of value for the subject property of $22.83 to $26.18 per square foot.  Exhibit D.   The market sales support the valuation determination under the income approach.

            4.         Complainant failed to present substantial and persuasive evidence tending to indicate that the decision of the Board of Equalization was incorrect.  Complainant wholly failed to present any market data in support of its opinion of value.  The balance sheet submitted by Complainant fails to explain higher than market vacancy rates and includes depreciation and real estate taxes; both of which are factors included in a capitalization rate rather than as expense items.  Further, payments to the trust of some $275,000 per year are not proper expense items for the purpose of calculating market value.  Complainant’s argument that no profits are realized is not credible.

            5.         The decision of the Board of Equalization setting value of $1,600,000 is affirmed.

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).

 

DISCUSSION

 

            In order to prevail, Complainant must present substantial and evidence tending to show that the value determined by the Board of Equalization is incorrect and that the value it is proposing is correct.  Complainant presented no appraisal report and no market data in support of its opinion of value. Complainant has failed to meet its burden of proof.           

ORDER

The assessed value determined 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 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 January 10, 2007.

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 10th day of January, 2007,  to:  David Halphin, 9200 Ward Parkway, Suite 550, Kansas City, MO  64114, Attorney for 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; Christopher Williams, 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