State Tax Commission of Missouri

NICHOLAS PAPPAS, )

)

Complainant, )

)

v. ) Appeal Number 09-84003

)

DAN WARD, ASSESSOR, )

ST. FRANCOIS COUNTY, MISSOURI, )

)

Respondent. )

DECISION AND ORDER

HOLDING

Decision of the St. Francois County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE for 2009 and AFFIRMED for 2010. True value in money for the subject property for tax year 2009 is set at $239,490, assessed value of $44,140. True value in money for 2010 is set at $239,640, assessed value of $44,160. Complainant appeared pro se. Respondent appeared in person and by Assistant Prosecuting Attorney, Patrick King. 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, 2009.

SUMMARY

2. Complainant’s Evidence. Complainant testified in his own behalf. He testified his opinion of the true value in money for his property as of January 1, 2009, was $184,210. The opinion was based upon the 2007-08 valuation of the property by the Assessor. Mr. Pappas offered the following exhibits into evidence:

EXHIBIT	DESCRIPTION	DISPOSITION
A	Maps of Subject Property	Received
B	History of Assessment	Excluded
C	St. Louis County Change Notice	Excluded

Counsel for Respondent objected to Exhibits B and C on the ground of relevance. Objection was sustained.

3. Respondent’s Evidence. Assessor Ward testified in his own behalf. Exhibit 1 was received into evidence. Exhibit 1 consisted of the following documents: summary statement on 2009 valuation; first page of the Property Record Card for the subject property; photographs of two sheds on the subject property; Small Acreage Tables used in St. Francois County for land valuations; Property Record Cards on five surrounding properties with large acre tracks.

4. Subject Property. The subject property is located at 1261 Lake Avalon Road, Bismarck, Missouri. The property is identified by map parcel number 15-5-15-4. The property consists of a one acre home site and 98.13 acres of agricultural graded land. The home site is improved by a single-family house.

5. Complainant Failed To Prove Value. Complainant failed to present substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009.

6. Complainant Failed To Prove Discrimination. Complainant presented no evidence to establish that the Assessor or Board of Equalization had assessed the residential portion of the subject property at a ratio greater than 19% or the average residential assessment ratio for St. Francois County. Nor was any evidence presented to establish that the agricultural real property had been assessed at a ratio greater than 12% or the average agricultural assessment ratio for St. Francois County.

7. Assessment of Open Sided Shed. In May 2009, Complainant added a 17 x 30 foot frame and metal open sided shed to an existing shed. The Assessor added this as an improvement that had existed prior to January 1, 2009, with a value of $150.[1] This new construction and improvement cannot be added for the 2009 assessment, but must be added for the 2010 assessment.

8. Adjustment to 2009 Assessment. The 2009 assessed value is reduced by $18 to account for the $150 value for the 2009 shed edition. Therefore the 2009 Assessed value is $44,142, rounded to $44,140, appraised value of $239,490.

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. 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.[2]

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[3] The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[4] When as in this case, Complainant fails to present any relevant evidence to establish the fair market (true value in money) value of the property being appealed, the Board presumption stands.

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.[5] It is the fair market value of the subject property on the valuation date.[6] 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 both 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.[7]

Methods of Valuation

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.[8] Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[9] Complainant’s opinion of value was not derived from any recognized methodology for the appraisal of real estate.

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, 2009.[10] There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[11]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[12] 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.[13]

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[14] The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[15] In the present appeal, Mr. Pappas’ opinion of value was based upon the assessment for the 2007-08 assessment cycle. He believed the value should not change due to existing economic conditions. There are two fatal flaws to the taxpayer’s opinion of value. First, it assumes that the 2007-08 valuation of the property was at true value in money for January 1, 2007. Second, it assumes that current economic conditions for a property like the subject have resulted in no increase in value.

No market data was presented that would establish first that the value of the residential portion of the property, as of January 1, 2007, was $184,210. Furthermore, no market data was introduced to establish that the subject property did not increase in value from 2007 to 2009. In short, the basis for the owner’s opinion of value was mere speculation, simply conjecture. Speculation and conjecture never form the proper elements or a proper foundation for an opinion of value. Absent sound and relevant market data on these two elements, the owner’s opinion is not entitled to any probative weight.

Complainant failed to meet his burden of proof. Subject to the correction in value relating to the shed addition in Findings of Fact 7 and 8, supra, the Board decision stand.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Francois County for the subject tax day is SET ASIDE for 2009, and AFFIRMED for 2010.

The assessed value for the subject property for tax year 2009 is set at $44,140 and for 2010 the assessed value is set at $44,160.

A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service. The application shall contain specific grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the appeal is based will result in summary denial. [16]

The Collector of St. Francois County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.

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 November 10, 2009.

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 10^th day of November, 2009, to: Nicholas Pappas, 4234 Valley Crest Hills Drive, St. Louis, MO 63128, Complainant; Patrick King, Assistant Prosecuting Attorney, 1 N. Washington, Suite 301, Farmington, MO 63640, Attorney for Respondent; Dan Ward, Assessor, County Courthouse Annex, 1 W. Liberty, Suite 200, Farmington, MO 63640; Mark Hedrick, Clerk, Courthouse Annex, 1 W. Liberty, Suite 300, Farmington, MO 63640; Pamela Williams, Collector, Courthouse Annex, 1 W. Liberty, Suite 201, Farmington, MO 63640.

___________________________

Barbara Heller

Legal Coordinator

[1] Testimony of Complainant; Testimony of Respondent.

[2] Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.

[3] 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).

[4] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

[5] 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).

[6] Hermel, supra.

[7] 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.

[8] 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 (Mo. banc 1975).

[9] St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

[10] Hermel, supra.

[11] See, 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). Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).

[12] See, Cupples-Hesse, supra.

[13] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

[14] Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).

[15] Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).

[16] Section 138.432, RSMo.