Maureen Monaghan, Chief Counsel

Relative Property Tax Burden

 1980s Litigation – Supreme Court Decision and Legislation to Equalize State  1985 – Statewide reassessment completed  Establishment of fractional assessments ◦ Residential – 19% ◦ Ag -12% ◦ Commercial – 32% ◦ Personal Property – 33 1/3%

 Property has a market value of $100,000  Classified as residential  Assessed value is $19,000  6%  $1,140 Residential

 Property has a market value of $100,000  Classified as agricultural  10 acres  Productivity value is $850 per acre  $8,500 x 12% = $1,020 assessed value  6%  $61.20 Agriculture

 Property has a market value of $100,000  Classified as commercial - $32,000 AV  6%  $1,920 Commercial

 Assessor creates the Assessment Book for submission to the Clerk on July 1.  Clerk accepts the Assessment Book which is now referred to as the Tax Book. The Clerk will adjust values in accordance with BOE decisions, adds the levies and extends the taxes. The Clerk delivers the book to the Collector by October 31.  Collector accepts the Tax Book and initiates collection.

 1/1 Date of Value  3/1 Declarations due  6/15 Impact Notice  3 rd Mon in June – 1 st Class Co, appeals due  7/1 Assmt Book due  1 st Mon in July – 1 st class co BOE meet  2 nd Mon in July – BOE appeals due  3 rd Mon in July – BOE meet  7/31 BOE end (unless Charter -4 th Sat in Aug.)

 January 1 – valuation date  Odd year vs even year  March 1 – Personal property declaration  Impact notices  July 1 – turn over their books

 Appraised Value  Fair market value  True value in money

 Agriculture  Business Personal Property  Automobiles  Residential and Commercial Real Property

Grade2015Pre $1,035$985 2$850$810 3$645$615 4$405$385 5$205$195 6$158$150 7$79$75 8$31$30

 The original cost paid by the current owner, less freight, installation, and sales or use taxes and date of purchase is reported by the owner.  The Class Life and Recovery period is determined by using IRS Publication 946 – Accelerated Depreciation  The assessor applies the proper depreciation schedule found in § , RSMo, by applying the years since acquisition and the appropriate recovery period to determine the appraised value.  The appraised value is multiplied by the statutory assessment level for personal property, 33 1/3% to establish the assessed value.  Cost approach with straight line depreciation

 Statutorily required method.  (9)  Use the trade-in value published in the October issue of the National Automobile Dealers' Association Official Used Car Guide.  The average trade-in value  For vehicles two years old or newer from a vehicle's model year, the assessor may use a value other than average without performing a physical inspection of the motor vehicle.

 Land  Buildings, structures, improvements and fixtures  Rights and privileges belonging to the land

 Cost  Sales Comparison Approach  Income Approach

A buyer will not pay more for one property than the cost of acquiring an equally desirable substitute property, assuming no undue cost or delay.

 Reproduction  Cost of producing an exact replica using the same materials, design and workmanship  Replacement  Cost of producing a building with the same utility using modern materials, design and workmanship

 Land value based upon comparable sales of unimproved land;  Explanation as to why replacement or reproduction cost was used  Estimate of the cost new, including the method used and sources of information  Amount and type of depreciation  Final opinion of value

 Marshall and Swift  Boeckh Publications  Dodge Cost Systems

 Physical  Functional  External

 Curable items – worn flooring, paint, etc  Incurable items – cracked foundation

 Curable: inadequate hot water heater  Incurable: poor layout, ceiling height (too high, too low)

Outside factor impacting the property Zoning, busy roads, economy, environmental

Uses property sales to estimate the value of an unsold property.

 Sales information should include the location, date of sale, conditions of sale, sq ft of land and building, sale price, source information  Explain why those properties selected  How the sales were verified  Listing of the adjustments  Explanation and market data on adjustments  Final opinion of value

 Thorough inspection of the properties  Verification of sale and conditions  Close comparability with subject  Superior and inferior comparables  Market support for adjustments  Sales grid

Converting income into a value estimate. The value of a property is equivalent to the present worth of the net income expected to be generated by the property

 Market income and expenses  Income and expense statements ◦ Gross income ◦ Vacancy and collection loss ◦ Miscellaneous income ◦ Net Operating Income  Capitalization Method and Rate  Tax Levy Rate  Indication of Value

 $1000 income  $300 expenses  $700 net income  OAR 8%  $700 / 8% = $8,750 indicated value

City of St. LouisFirst Class Counties  Assessor – President of the Board  4 property owning citizens appointed by the mayor  3 persons appointed by the County Commission

2 nd, 3 rd, 4 th Counties  County commissioners  Assessor (non-voting)  Surveyor  Two Citizens appointed by the Commission  Auditor (in 2 nd class counties)  Clerk (as secretary, non-voting)

 Hear complaints and appeals  Equalize assessments – adjust, correct, and equalize  Add Omitted Property

 3 rd Monday in June, appeals due  7/1 May meet in reassmt years  1 st Monday – Start  7/31 End  Charter  3 rd Monday in June, appeals are due  7/1 may start  1 st Mon in July – Start  4 th Sat in Aug - End

 2 nd Monday in July – Appeals Due  7/1 May start meeting in reassessment year  3 rd Monday in July – must start  7/31 End

 Exempt  Overvaluation  Misclassification  Misgraded Ag  Discrimination/Ratio

 (1) Lands and other property belonging to this state;  (2) Lands and other property belonging to any city, county or other political subdivision in this state;  (5) Property used for religious worship, for schools and colleges, or for purposes purely charitable;  (7) Motor vehicles leased for a period of at least one year to this state or to any city, county, or political subdivision or to any religious, educational, or charitable organization which has obtained an exemption from the payment of federal income taxes, provided the motor vehicles are used exclusively for religious, educational, or charitable purposes;  (10) Solar energy systems not held for resale;  POW + 100% disabled from military service - Home

 Owned and operated on a not-for profit basis;  Dedicated unconditionally to charitable activities;  Dominant use of the property must be for the benefit of an indefinite number of people and there must be a direct or indirect benefit to society.

 Using the approaches (cost, sales comparison and/or income) to determine market value of a property  Most common appeal  It is not the amount of the increase in the assessment

 Improved properties transitioning  Vacant Land  Based upon the actual use of the property

 (1) Immediate prior use, if any, of such property;  (2) Location of such property;  (3) Zoning classification of such property; except that, such zoning classification shall not be considered conclusive if, upon consideration of all factors, it is determined that such zoning classification does not reflect the immediate most suitable economic use of the property;  (4) Other legal restrictions on the use of such property;  (5) Availability of water, electricity, gas, sewers, street lighting, and other public services for such property;  (6) Size of such property;  (7) Access of such property to public thoroughfares; and  (8) Any other factors relevant to a determination of the immediate most suitable economic use of such property

 Taxpayer believes their property is assessed higher than others  Extremely hard to prove  Must show the median assessment of the subclassification of property

Prior to HearingsImportant Issues ◦ Publicize the appeal process ◦ Deadline to appeal ◦ Dates and times of hearings ◦ Establish schedule ◦ Allow adequate time ◦ Comply with the Sunshine law – Notices, Open meetings, etc ◦ May appeal in writing ◦ Appeal does not mean appear ◦ Written decisions are issued ◦ Property owner, attorney or agent may file and appear ◦ Opinion – owner, appraiser or attorney

Hearings  Clerk announces the case – provide names, property address, parcel number, etc.  Property identification – confirm address, classification, value of assessor, general description of the property  Allow property owner to present information  Allow Assessor’s officer to present information  Allow property owner to respond  Establish a procedure/process and follow it. All parties would like to be heard.

Conducting Hearings  Assessor should have all information regarding the assessment  Have materials for each appeal prepared  Make copies of the taxpayers information  Listen to all information provided  Emphasis on market value  Information should be reviewed after presentations  Let taxpayer know what you will be doing

 Purchase price of subject – determine if arm’s length transaction and date of sale  Newspaper articles – may provide info on trends but not market value of a specific property  Photos – might be worth a 1000 words, but doesn’t tell us what it would sell for  Graphs of tax increases

 Negotiate a settlement  Adjust based on hardships or individual’s circumstances  Grant exemptions without a legal basis  Allow unproductive arguments

Additional Information  Assessor may want to review something presented by property owner.  Provide a listing of all decisions to the clerk and assessor  Provide the assessor with any information you received  Decision  Notify taxpayer if any delay in the decision  Written decision in mail whether you change the value or not

SAMPLE BOE DECISION LETTER BOARD OF EQUALIZATION COUNTY OF XYZ Date of Mailing Agent 123 Simple Assessment, Missouri RE:Name: U R Taxpayer Parcel : Address: 456 Simple Classification: Residential Assessor’s Appraised and Assessed: $100,000/$19,000 BOE”s Appraisers and Assessed: $100,000/$19,000 The Board of Equalization of XYZ County, after full consideration of the information presented at the hearing, voted to sustain the Assessor’s value. You have a right to file an appeal with the State Tax Commission. If you chose to appeal, you may download forms from their website at You may contact the State Tax Commission at The appeal to the STC must be postmarked no later than September 30 of this year or 30 days after the above date, whichever is later. Sincerely County Clerk Proper Decision Format

 Date of Decision  Date of Mailing  Taxpayer’s name  Parcel/locator/account #  Classification  Assessed value  EVERY APPEAL GETS A DECISION  MAINTAIN COPIES OF DECISIONS, DOCUMENT DATE MAILED

 Member  Maintains the records  Adjusts the books according to the decisions or orders of the BOE

 September 30 or 30 days after the final action of the BOE, whichever is later  Exemption cases may go directly to Circuit Court

Years# of Appeals , , , , ,276

  Legal decisions  Information on valuation  Information on appeals  Department of Revenue ◦ Property tax assistance programs