An Open Letter to Property Owners, The Appeals Process

June 7, 2007

Open Letter to Phelps County Property Owners:

As the Assessor of Phelps County, it seems appropriate to ensure that property owners are familiar with the appeals process regarding their property assessments. To this end I feel it would be in every taxpayer’s interest to know about the following rights and procedures so that due process is not missed by a taxpayer in our county. Below, are discussions on 1) the appeal process now available to taxpayers, 2) tax districts and their levies, and 3) tax relief available in Missouri.

1. BOARD OF EQUALIZATION AND APPEALS

Recently reassessment was conducted in Phelps County for the tax year 2007. Real estate taxpayers were mailed a notice of increased in assessed value on April 30th. Missouri laws (RSMo 137.180 and 137.275) provide that property owners may appeal the increase or the assessment to the County Board of Equalization (BOE). BOE hearings can be heard regarding either real estate and/or personal property assessments. The County Clerk has publicized and set a deadline to file for BOE of June 15, 2007. To schedule an appointment or to make an appeal in writing, call the County Clerk at (573) 458-6115 for more information.

In general there are four reasons for filing for the BOE: valuation, discrimination, misclassification, and exemption. For valuation and discrimination appeals, the taxpayer has the burden to prove the market value as of January 1, 2007. The BOE may increase or decrease value as new evidence or information indicates.

While the County understands that many of our citizens have great difficulty paying property taxes, BOE hearings are not about making adjustments due to taxpayer hardship. The state legislature has made provision for taxpayer hardship as discussed below in “Tax Relief”. Nor are BOE appeals about negotiating a settlement. They simply concern establishing fair market value, classification, or exemption for property.

Taxpayers are not allowed to appeal a tax bill amount. Taxpayer’s rights for appeal are now, starting with the BOE appeals. Taxpayers who wait until their actual tax bills come out to decide whether their appraised value is accurate will have waived their rights to due process for their 2007 assessed value. These taxpayers would have the right to appeal their appraised value in the following year, but that appeal would only apply to that year.

Taxpayers may appear before the BOE without having had an informal hearing with the assessor’s office. Any person may appeal in person, by attorney or agent (some restrictions apply), or in writing. A hearing with the BOE is the first step in the statutory appeal process. In order to appeal to the State Tax Commission, the taxpayer MUST first appeal to the BOE. Two exceptions to this are: 1) taxpayers seeking exemption may go straight to Circuit Court, 2) if the taxpayer’s valuation increased or property was assessed for the first time and the taxpayer was not provided proper notice, STC rules provide that the taxpayer may appeal directly to the STC.

Taxpayer appeals to the STC should be done by September 30 or 30 days after the final action of the BOE, whichever is later. The State Tax Commission’s web site http://www.stc.mo.gov/ features resources which explain reassessment more fully. The web page http://www.stc.mo.gov/brochures.htm presents additional information regarding the appeals process which consists of the assessor’s informal hearings, the county’s board of equalization, and the State Tax Commission appeals.

2. TAX LEVIES

Missouri state law requires assessor’s in the state of Missouri to conduct reassessments every two years and if required to, to raise the county property values to reflect what property has actually been selling for. Our local tax base for the schools, cities, fire districts, ambulance districts, county, and other taxing districts are provided for by the assessor’s values. Our property tax system is an ad valorem tax, which is a tax based solely on value. As the value of property changes, whether it be real estate or personal property, the assessor is responsible for reflecting this change in value in the county assessments. In real estate reassessments where an assessor raises the assessed value above the normal growth factors allowed in the tax base, such as new construction and CPI, it is clear that these taxing districts are then responsible for rolling back or reducing the levies from their current levels to a lesser amount. This is the mechanism which protects taxpayers from having increased tax bills due to reassessment and also keeps the tax levying districts from gaining excess funds without a vote of the people in their district. Clearly then, it is the responsibility of these districts to roll their levies back to the fullest extent during reassessment. There is taxpayer concern throughout the state of Missouri, that tax districts will not roll back the fullest extent due to minimum levies that have been established throughout the years for the different types of districts. However, districts are required to calculate new levies during times of reassessment, and it then becomes the responsibility of the boards of the tax districts to roll back the full extent or to vote as a board to roll the levy back up to some level above the full roll back. Tax levies are not set by the assessor’s in this state. They are set by the appointed or elected board members representing the tax district in matters regarding that tax district. Taxpayers who are concerned about fair treatment with tax levies should be corresponding with the appropriate boards or perhaps even attending each district’s public tax levy hearings this summer to ensure fair treatment.

3. TAX RELIEF

In general, tax relief is intended for qualified senior citizens or 100% disabled individuals. Tax relief is available for those who qualify through, first, the Property Tax Credit (commonly known as the Circuitbreaker) and secondly, the Homestead Preservation Credit (HPC). Citizens who are eligible for the Property Tax Credit (PTC) should apply for this credit and not the Homestead credit. Citizens not eligible for the PTC will likely qualify for the HPC and should apply for it the year following a tax bill increase. In 2007, the property owners in the St. James School district that did not qualify for the PTC should now be applying for the Homestead credit. They have until October 15th of2007 to do so. Application for these credits is done through the Missouri Department of Revenue (DOR) in Jefferson City. The following DOR web pages, http://www.dor.mo.gov/tax/personal/ptc/ and http://www.dor.mo.gov/tax/personal/homestead/ have more information or you can call the DOR at (573) 751-3505 for more information. Copies of the eligibility requirements are also available in the assessor’s office.

Respectfully,

Kevin D. Rasmussen
Assessor, Phelps County