State Tax Commission of Missouri

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused her discretion as the trier of fact and concluder of law in this appeal. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995). Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).

Request for Reopened Hearing to Submit Additional Exhibits

At the outset the Commission addresses the request for reopening the hearing for the submission by Complainant of certain documents as exhibits in the appeal.

Complainant tendered with his Application for Review the following documents which had been marked as exhibits by Complainant or Complainant’s Counsel.

Exhibit H – 2005 Assessment Ratio Study – Updated

Exhibit I – Affidavit of Robert B. Smith, III

Exhibit J – Resumé of Robert B. Smith, III

Exhibit K – Affidavit of Steven A. Weber

Exhibit L – Summary and Analysis of “Comparable Sales analysis Report for Tax year – 2005”

Exhibit M – Letter dated October 21, 2004 to Respondent from the State Tax Commission

Exhibit N – Report, dated December 22, 2005 on meeting with Respondent and the St. Louis County Director of Revenue by Sylvian L. Schoeneberg, Assistant Manager, State Tax Commission

Exhibit O – Respondent’s Final Value Ratios (2004 Sales) for the 2005 Reassessment

Exhibit P – Assessor’s Office Inspection Notice for subject property

Complainant makes no allegation that the hearing officer who presided at the evidentiary hearing (Hearing Officer W. B. Tichenor) had refused to admit into evidence any of these documents. He had not, the exhibits were not offered as exhibits at the hearing. Complainant simply advises the Commission that the sales ratio study originally presented has been “amended … to correct the aspects of their sales ratio study that the hearing officer found to be incorrect.” This is the basis for requesting that the evidentiary hearing be reopened and the new exhibits be received as evidence.

Complainant cites no statutory authority or case law which holds that simply because a taxpayer fails to meet their burden of proof the Commission is required to allow an amending of evidence or a submission of new evidence to correct flaws, defects and short comings in the original case. If the Commission were to proceed down this path for handling appeals, it would provide a never ending continuation of the appeal process. If Complainant’s request were to be granted, the Commission would find taxpayers and assessors always wanting another bit at the evidentiary apple, one more opportunity to bring in more evidence.

The Complainant had every opportunity to prepare his case and present the evidence he deemed necessary to meet this burden of proof. There was no procedural defect in the evidentiary hearing which warrants a reopening of the appeal to permit the Complainant to present additional evidence. Complainant’s request to have the hearing reopened and the exhibits received as evidence is without merit. Accordingly it is denied.

Alleged Error in Decision

Complainant asserts the Hearing Officer erred in holding that Complainant failed to present substantial and persuasive evidence to establish discrimination, because the sales ratio study presented was correct to establish that residential property in St. Louis County was substantially under assessed. Complainant’s argument is defective in two aspects.

No Detailed Grounds for Error in Decision

First, the assertion is a general claim and is not supported by specific detailed grounds as to how that Hearing Officer Johnson’s Finding of Fact 4 (Decision, p. 3) was in error. The Hearing Officer specifically set forth four specific and separate reasons to support her finding. Complainant omitted to address in any form or fashion how or why any one of these were in error, let alone why all four were in error. In short, the Hearing Officer’s conclusion that Complainant’s evidence was not substantial and persuasive is founded upon sound reasons which have neither been attacked, nor refuted in any specific detail by Complainant.

Admission that Decision Not in Error

Second, Complainant’s claim that the sales ratio study presented at hearing was correct is totally rebutted by his offering of an amended and corrected study. The submission of Exhibit H is Complainant’s admission that the Hearing Officer got it right, exactly for the reasons she enumerated in Finding of Fact 4. If Complainant’s sales ratio study (Exhibit A through D) constituted substantial and persuasive evidence, there was no need to amend the study. There was no need to correct the study if it was correct as presented.

The request to have a new study received into evidence specifically for the reason to correct the aspects of the original study which the hearing officer properly found to be incorrect simply affirms the conclusion reached by the hearing officer. If the findings of fact arrived at by Hearing Officer Johnson were in error, Complainant would have argued from the evidentiary record established at hearing on December 19, 2006 the reasons and basis for any error in Hearing Officer Johnson’s findings. That was not done. Instead Complainant seeks to present a amended and corrected ratio study, thus admitting and confirming the hearing officer’s findings were correct.

The Hearing Officer did not err in her determinations as challenged by Complainant.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified or that the evidentiary hearing should be reopened and additional evidence be received. Accordingly, the Decision is affirmed.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts. If no petition for judicial review is filed within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse to the appropriate taxing jurisdictions the protested taxes presently in an escrow account for this appeal.

SO ORDERED September 18, 2007.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jennifer Tidwell, Commissioner

Charles Nordwald, Commissioner

DECISION AND ORDER

Summary

The subject appeal questions the proper level of assessment to be applied to Complainant’s residential property for tax year 2006. The subject property was originally valued by the Assessor at $892,000 (assessed value $169,480). Said value was lowered by the Board of Equalization to $806,100 (assessed value $153,159). Complainant does not dispute the Board’s market value but asserts that, based upon the average level of assessment within the County, his property should be assessed at 15.03% or $122,440.

An evidentiary hearing was held on Tuesday, December 19, 2006, before W.B. Tichenor, Senior Hearing Officer. Complainant appeared pro se. Respondent appeared by Ms. Paula Lemerman, Associate County Counselor. Pursuant to Section 138.431.4, RSMo, this appeal has been transferred to Senior Hearing Officer Luann Johnson, for Decision and Order.

Complainant has failed to present substantial and persuasive evidence tending to demonstrate that the assessed value placed upon the subject property by the St. Louis County Board of Equalization was erroneous or discriminatory.

Issue

The issue in this case is whether or not Complainant’s property was being assessed at a higher percentage of market value than a statistically significant number of similarly situated properties in the County.

Exhibits

Complainant’s Exhibits

Complainant introduced the following exhibits into evidence:

Exhibit A – Summary Sheet

Exhibit B -- Assessment Ratios – 2005

Exhibit C -- Valuation Data

Exhibit D -- Ladue School District Ratio Analysis

Exhibit E -- Proposed Adjustment

Exhibit F -- State Tax Commission Appeal No. 05-20154

Exhibit G -- E-mail to Complainant dated 11-29-06

Respondent’s Exhibits

Respondent introduced the following exhibits into evidence:

Exhibit 1 -- Certificate of Value on Subject Property and Warranty Deed

Findings of Fact

1. Jurisdiction is proper. Complainant timely appealed from the determination of the St. Louis Board of Equalization.

2. The subject property is a single-family residence identified as parcel number 18K110434, more commonly known as 24 Berkley Lane, St. Louis, Missouri.

3. The correct market value for the subject property on January 1, 2006, was $806,100, as determined by the Board of Equalization. The correct assessed value for the subject property on January 1, 2006, was $153,159.

4. Complainant’s purported sales ratio study is incorrectly prepared and is not competent to establish the average level of assessment for residential property as of January 1, 2005, for the following reasons:

a. Pursuant to Section 137.115.1, RSMo, new assessed values are based upon economic conditions in effect on January 1 of each odd-numbered year. All of Complainant’s sales occurred after January 1 of 2005 and Complainant made no adjustment to said sales data to reflect market conditions on January 1, 2005, as required in a properly prepared ratio study;

b. Complainant failed to properly verify his sales. Complainant’s sales data was obtained from a relator who states on her computer print-out: “All information herein has not been verified and is not guaranteed.” Complainant asserts that he verified his sales information by comparing same to County sales information. However, as pointed out by the County, the fact that the County lists raw sales information does not, in and of itself, establish that said sales information is valid nor does it reflect actual sales prices of property. As further evidence of this fact, Complainant’s own sworn certificate of value overstates the purchase price of his property.

c. Complainant failed to examine sales to determine if they were arm’s-length transactions without the existence of creative financing.

d. Complainant failed to examine said sales to determine if their assessed values were impacted by fractional assessments under the Occupancy Law.

5. Complainant has failed to present substantial and persuasive evidence tending to demonstrate that the correct level of assessment for the subject property was 15.03%.

CONCLUSIONS OF LAW

Burden of Proof

There is a presumption in favor of the Board of Equalization. Therefore, in order to prevail Complainant must demonstrate, by substantial and persuasive evidence, that his residential property is assessed at a higher percentage of true value than a statistically significant number of other residential properties in St. Louis County.

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).

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).

Discrimination

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainant has the burden to prove:

1. The level of assessment for the subject property in 2006. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.

2. The average level of assessment for residential property in St. Louis County in 2006. This is done by (a) independently determining the market value of a representative sample of residential properties in St. Louis County; (b) determining the assessed value placed on the property the assessor’s office for the relevant year; (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.

3. That the disparity between (1) and (2) is grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).

DISCUSSION

Complainant Failed to Prove Discrimination

Complainant produced a large volume of raw sales data in support of his contention that the County was assessing his property at a higher percentage of true value that a statistically significant number of other residential properties in the County. However, he failed to recognize that the statutory assessment scheme contemplates that the assessor calculate value based upon a fixed point in time and the economic conditions in existence at that point in time. Thus, the only relevant valuation date is January 1, 2005; the date fixed by law. Inasmuch as sales do not typically occur all on one particular date, sales information arising before or after said date must be appropriately adjusted to reflect the value of the property on January 1, 2005. Unadjusted sales prices arising six months or a year after the relevant date do not establish underassessment. Given the current trend of increasing property values, it is safe to say that unadjusted sales occurring after the relevant tax day are generally always going to demonstrate a higher value than the value attributed to the property on the tax day.

Complainant’s reliance on raw sales data also means that we have no assurance that the sales are arms length transactions; do not involve creative financing; and do not include partial year assessments arising because of the Occupany Law. Raw sales data is capable of hiding a whole host of issues that must be identified and dealt with in a properly prepared ratio study; none of which Complainant was able to address.

For the foregoing reasons, Complainant has failed to establish that a statistically significant number of residential properties in the County are being assessed at less than 19% of market value.

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 St. Louis 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 February 8, 2007.

STATE TAX COMMISSION OF MISSOURI

Luann Johnson

Senior Hearing Officer