By Amy S. Westermann, State Tax Commission Chief Counsel
In last month’s issue, I discussed an overview of reassessment for purposes of ad valorem property taxation and the related appeal process before the State Tax Commission’s administrative tribunal. Reassessment in Missouri occurs on January 1 of odd years for real property and on January 1 annually for personal property. The appeal process provides an avenue for taxpayers to challenge their assessment through litigation and helps to ensure no taxpayer pays more than his or her fair share of property taxes. The following 10 Things to Know have evolved from questions I am asked most often about procedures in appeals before the STC.
1. The STC appeal process does not directly address the taxes levied on property: Missouri’s local taxing districts, which provide local public services, receive their funding from ad valorem taxes on real property and personal property. The taxes collected are determined by applying the levy set by the local taxing districts to the assessed value of the property, which is a percentage of property’s fair market value. See Section 137.115.1. The STC is specifically prohibited from setting or fixing levies. See Section 138.340. The appeal process before the STC only addresses the assessment of the property at issue, which indirectly may affect the taxes calculated on the assessment.
2. The STC administrative tribunal’s jurisdiction is derivative of a prior decision by the local Board of Equalization: Appeals before the STC may originate from any of Missouri’s 114 counties or the City of St. Louis. For the STC administrative tribunal to obtain jurisdiction over an appeal, a taxpayer first must have appealed the local county assessor’s assessment of the property to the local BOE and received a decision from the BOE. Appeals to the BOE must be filed by the second Monday in July. See Sections 137.275, 137.385, and 138.180. Once the BOE issues a decision letter, the taxpayer may appeal to the STC within 30 days or by September 30 of the same tax year, whichever occurs later. See Section 138.110; 12 CSR 30-3.010. The assessor is not allowed to appeal to the STC following the BOE’s decision.
3. Exceptions may apply: While an appeal to the BOE is a prerequisite in nearly all cases before filing an appeal with the STC, 12 CSR 30-3.010 provides a few specific exceptions and allows a direct appeal to the STC where the taxpayer: is a new owner who purchased the property with 30 days or less before the deadline for filing an appeal with the BOE passed; is a new owner who purchased the property after the BOE filing deadline passed; or did not receive a notice of initial assessment or increase in assessment from the county until the tax bill was received. Even if one of these exceptions applies, the appeal must be filed with the STC on or before December 31 of the same tax year or within 30 days after the county first communicated the assessment, whichever occurs later.
4. We use digital documents and electronic files: Starting with the 2020 tax year, the STC Legal Section made the conversion to digital documents and electronic case files and discontinued the use of paper files. Because the STC is a quasi-judicial agency within the Executive Branch of State government, the administrative tribunal utilizes a proprietary electronic case management system or CMS and not Case.net. Appeals may be filed online at https://stc.mo.gov/file-an-appeal/ or by using a digital Complaint for Review of Assessment form. See 12 CSR 30-3.010. When filing online, the user follows on-screen instructions to input data, to generate a completed Complaint for Review of Assessment form, and to upload a copy of the BOE’s decision letter. If a user is unable to use online filing, a fillable PDF version of the Complaint for Review of Assessment form can be downloaded from the STC’s website, completed, and returned for filing by email to [email protected] A scanned copy of the BOE’s decision letter must be filed along with the Complaint for Review of Assessment form. A paper copy of the Complaint for Review of Assessment form will be mailed upon request to pro se taxpayers who do not have Internet access, which can be completed and returned to the STC’s address on the form. We will scan the returned form to create a digital document. No filing fee is required for any appeal regardless of the method of filing.
5. Universal naming conventions are necessary: The STC’s case management system assigns each appeal with a unique case number consisting of a prefix denoting the tax year followed by a five- or six-digit number specific to the county where the appeal originated. The appeal is captioned using its unique case number plus the name of the taxpayer versus the assessor of the county where the case originated. The taxpayer is denominated “Complainant,” and the assessor is denominated “Respondent.” Once an appeal has been processed in the STC’s case management system, an official Notice of Appeal is issued to the Respondent. See Sections 138.430.4 and 536.067. The parties should refer to the case caption in any correspondence, entries of appearance, motions, exhibits, or other documents filed with the tribunal.
6. The appeal is litigation: The STC’s Legal Section is the administrative tribunal within the agency that decides contested cases between taxpayers and local county assessors. See Sections 138.340, 138.431, and 536.063. Neither the Chief Counsel nor the Senior Hearing Officers represent any party; rather, the presiding officer functions as an administrative law judge in appeals assigned to him or her. The Legal Section does not issue advisory opinions or advance rulings. Each case is decided based on the current law applied to the facts in evidence. Although the assessor of the county is denominated the Respondent, an appeal is actually a challenge to the assessment of the property as determined by the BOE. The BOE’s determination is presumed correct, so the Complainant has the burden of proof. To prevail, the Complainant must present substantial and persuasive evidence to rebut the presumption of correctness and to establish the assessment that should have been made. See Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020); Westwood P’ship v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003). This is a two-step process that requires the Complainant to show the BOE’s determination regarding the subject property was incorrect and that, more likely than not, the Complainant’s opinion of what the assessment should be is correct. The administrative tribunal’s authority is limited to hearing cases of overvaluation, misclassification, misgrading of agricultural land, ratio discrimination in assessment, and exemption of property.
7. We strive to preserve a clean record in every case: The Legal Section discourages parties from communicating with the administrative tribunal informally about case matters. The presiding officer is acting as the impartial administrative law judge in a contested case under the Missouri Administrative Procedures Act, Chapter 536 of the Revised Statutes of Missouri, and operating under the code of judicial conduct. This obligation requires us to uphold the integrity and independence of the judiciary; avoid impropriety and the appearance of impropriety; and perform the duties of office impartially and diligently. This includes the duty to avoid ex parte communication with either party. Any requests or motions should be formally presented under the caption for the case and filed by email to [email protected] The presiding officer will communicate substantive information and any pre-trial rulings through formal written orders. Parties should expect a series of orders as a case progresses from filing to disposition. The first order in the series is the assignment order, which notifies the parties of the presiding officer in the case. The presiding officer then issues a scheduling order setting dates and times for a prehearing conference and an evidentiary hearing. The scheduling order will include a calendar for discovery that includes due dates for the parties to issue initial disclosures, make requests for production, disclose expert witness’ information and reports, make objections, and file rebuttal evidence. Orders are delivered to the parties via email in all cases unless a party specifically requests delivery via U.S. Mail.
8. Our administrative practices are intended to accelerate the pace of litigation: Tens of thousands of cases from across the State are filed with the STC each year, and streamlining the litigation process is important for the efficient administration of appeals. The prehearing conference (PHC) is key for narrowing the issues and determining if an early settlement or dismissal is possible. No evidence or exhibits are evaluated by the presiding officer during the PHC. If no settlement or dismissal occurs at the PHC, the appeal moves on to the discovery stage of litigation and toward the Evidentiary Hearing, which is a bench trial. Evidence and exhibits are pre-filed to keep the pace of the litigation progressing in a timely manner and to limit the length of Evidentiary Hearings. For example, STC appeals employ pre-filed written direct testimony of witnesses so that a witness can be sworn and identified on direct examination to lay the foundation for any exhibit prepared by the witness, then quickly tendered for cross examination by opposing counsel. Parties should file their exhibits and evidence via email to [email protected] with the case number and name in the subject line and the name of the document being filed. Where an exhibit or document is too large to submit via email, the parties should contact the Legal Section to obtain instructions for filing through a file transfer protocol account.
9. We generally observe the Missouri Supreme Court Rules of Civil Procedure: The STC promulgated 12 CSR 30-3.030, effective April 30, 2020, which provides that the administrative tribunal may, by order, enforce discovery for cause shown by the same methods, terms, and conditions as provided by the Missouri Supreme Court rule in civil actions in the circuit court, except as may otherwise be required by law. The fundamental rules of evidence will apply at hearings before the STC’s administrative tribunal. See 12 CSR 30-3.010(5). The computation of time in appeals is directed by 12 CSR 30-3.010(6) and (7), which largely tracks the language of Rule 44.01(a) and (b).
10. Technology has become our friend: Since the early days of the pandemic in 2020, we have adopted the WebEx platform as the default forum for holding PHCs, hearings on motions or discovery disputes, and Evidentiary Hearings remotely. Informal surveys of attorneys, taxpayers, and local county officials reveal that parties prefer the use of remote hearings before the STC. When necessary, perhaps due to a party’s or a witness’ inability to attend a remote hearing, the presiding officer will schedule an in-person hearing within the county where the appeal originated, typically at the county courthouse or administration building. All evidentiary hearings are audio recorded, regardless of the location. See Section 138.431.4. A digital audio transcript is available within a day or two of the hearing and can be requested by either party.
Additional information about the appeal process before the STC Legal Section and detailed educational resources about the reassessment cycle are available on the STC website at stc.mo.gov.