FOR REVIEW OF A DECISION OF THE ADMINISTRATIVE HEARING
COMMISSION, The Honorable Brett W. Berri, Commissioner.
Breckenridge, C.J., Fischer, Stith, Draper and Russell, JJ.
C. WILSON, JUDGE.
Administrative Hearing Commission ("Commission")
determined that Charles and Mary Harter (the
"Harters") improperly calculated their income
eligibility for purposes of the Property Tax Credit
("PTC") under sections 135.010 to
135.035.The Commission found that the
entire amount of Mr. Harter's social security and annuity
payments should be included in their "income" for
PTC purposes under section 135.010(5). As a result, the
Commission found that the Harters were eligible only for a
reduced PTC for the 2010 tax year under section 135.030.2 and
that they were not eligible for any PTC for the years 2011-13
because their income exceeded the "maximum upper
limit" of income eligibility under section 135.030.1(1).
The Harters seek judicial review of the Commission's
decision. This Court has jurisdiction under article V,
section 3, of the Missouri Constitution, and the
Commission's decision is affirmed.
Harter is a former attorney with the Missouri Department of
Revenue (the "Department"), and Mrs. Harter is a
retired schoolteacher who was adjudged disabled by the
Missouri Public School Retirement System (the
"MPSRS"). Since 2009, the Harters have been
claiming the PTC on their Missouri tax returns. The Director
of the Department (the "Director") initially
disputed the Harters' eligibility for the PTC based upon
a lack of proof of disability. Mr. Harter contacted the Director's
legal counsel about this issue and explained that, because
Mrs. Harter had been a schoolteacher, she had no involvement
with the Social Security Administration and had been
determined disabled by the MPSRS instead.
2010 letter to Mr. Harter, the Director's legal counsel
stated that she would place a note in the Harters' file
indicating that the determination by the MPSRS was sufficient
to prove Mrs. Harter meets the disability criterion for
eligibility for the PTC under section 135.010(2). In this
same letter, however, counsel indicated that the Harters'
2009 "income" for PTC purposes - as defined by
section 135.010(5) - exceeded the "minimum base"
income under section 135.030.1(2) and, accordingly, they were
entitled only to a reduced or prorated PTC under section
135.030.2. The Harters did not challenge this determination.
August 11, 2014, the Director issued final decisions about
the Harters' income tax liability for the years 2010-13.
As part of these decisions, the Director determined the
Harters' eligibility for the PTC for those years. For
2010, like 2009, the Director determined that the Harters
were entitled only to a reduced or prorated PTC under section
135.030.2 because - under section 135.010(5) - their 2010
"income" for PTC purposes exceeded the
"minimum base" income under section 135.030.1(2).
For 2011-13, the Director determined that the Harters were
not eligible for any PTC under section 135.030.2 because
their "income" for PTC purposes in those years
exceeded the "maximum upper limit" under section
Harters timely filed a petition before the Commission
claiming the Director improperly applied the definition of
"income" for PTC purposes under section 135.010(5)
and, as a result, they were entitled to a PTC, without
reduction, for each of the years 2010-13. The Commission calculated the Harters'
"income" for PTC purposes under section 135.010(5)
and determined that the Harters were entitled only to a
prorated PTC for 2010 under section 135.030.2 and were not
income eligible for any PTC for the years 2011-13 under
section 135.030.1(1). The Harters appeal this determination.
outset, it appears the Harters misperceive the nature of the
Commission's role and, as a consequence, both the nature
of the Commission's actions and this Court's review.
Each of their four points relied on begins: "The
Administrative Hearing Commission erred in dismissing
appellants' case by …." But the Commission
did not "dismiss" the Harters' case. Instead,
it determined - as if in the first instance - the
Harters' "income" for PTC purposes under
section 135.010(5) for each of the years in question. In
J.C. Nichols Co. v. Dir. of Revenue, 796 S.W.2d 16,
20 (Mo. banc 1990), this Court explained:
[T]he Commission is simply a hearing officer who exercises
the same role as any administrative hearing officer
authorized to hear contested cases within an agency .... It
simply determines, on evidence heard, the administrative
decision of the agency involved. The ... Commission decision
becomes the administrative action of the Department.
The legislature intended for the Commission to render the
agency's decision. This is the import of the
language of Section 621.050.2, requiring adherence to the
procedures of Chapter 536 in appeals from the Director to the
Id. at 20 (emphasis added) (quotation marks and
Commission sagely explained in the present case, "we do
not review the Director's actions, we remake them."
Commission's Amended Decision, at p. 25. This Court, in
turn, reviews the decision of the Commission, not the
Director. Where, as here, the taxpayers' petition raises
no genuine issues of material fact and the Commission's
decision decides only questions of law, this Court's
review of the Commission's decision is de novo.
Eilian v. Dir. of Revenue, 402 S.W.3d 566, 568 (Mo.
The Commission Properly Determined the Harters'
their petition under section 621.050.1, RSMo 2000, the
Harters did not contest the Director's determination of
their Missouri Adjusted Gross Income ("MAGI") for
the years 2010-13 or the income taxes due upon those amounts.
Instead, the Harters only challenged the Director's
determination regarding their eligibility for - and the
proper amount of - the PTC in those years. Accordingly, that
is the only issue the Commission addressed and it is the only
issue before this Court. Fischer, 483 S.W.3d at
135.010 through 135.035 establish the PTC as a form of tax
relief for low-income taxpayers who are elderly or disabled.
The senior citizen property tax relief provisions offer an
individual … [an income] tax credit … for
[either the amount of] property taxes paid on the home and up
to five acres surrounding it or for … [a percentage]
of rent payments if the taxpayer is a renter. To
qualify the taxpayer must be over 65 years of age or
disabled and meet the income eligibility guidelines.
The credit is "refundable;" that is, if the credit
exceeds the taxpayer's tax liability, the director of
revenue will treat the unused portion of the credit as an
overpayment of income tax and will send the taxpayer a
Missouri Merchs. & Mfrs. Ass'n v.
State, 42 S.W.3d 628, 634-35 (Mo. banc 2001) (footnote
omitted) (emphasis added) (referred to herein as