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Armstrong-Trotwood, LLC v. State Tax Commission of Missouri

Supreme Court of Missouri, En Banc

May 16, 2017

ARMSTRONG-TROTWOOD, LLC, ARMSTRONG-BRITTANY, LLC, ARMSTRONG-ARBOR VILLAGE, LLC, ROBERT S. ROTHSCHILD, JR., SUSAN H. ROTHSCHILD, GEIGER REAL ESTATE, INC., and JOSH & ELAINE, LLC, Appellants,
v.
STATE TAX COMMISSION OF MISSOURI, BRUCE E. DAVIS, RANDY B. HOLMAN, VICTOR CALLAHAN, ST. LOUIS COUNTY, and JAKE ZIMMERMAN, Respondents.

         APPEAL FROM THE CIRCUIT COURT OF ST. LOUIS COUNTY The Honorable Joseph L. Walsh, III, Judge

          Mary R. Russell, Judge

         Appellants (Landowners) are taxpayers that own residential property located entirely in St. Louis County. They claim their property assessments are discriminatory and non-uniform in violation of article X, section 3 of the Missouri Constitution. In support of their claim, Landowners argue Jefferson and Franklin counties systematically undervalued property in those counties, allegedly causing Landowners to bear a "disproportionate share of the cost of operating" multi-county taxing districts. Landowners concede, however, their property valuations were accurate and uniform within St. Louis County. This Court affirms the dismissal of Landowners' administrative claims for review and their claim for declaratory relief.

         Factual Background

         Landowners pay taxes on residential property located entirely in St. Louis County. Their properties also fall within several multi-county taxing jurisdictions that levy tax rates on properties in St. Louis, Jefferson, and Franklin Counties.[1]

         Landowners appealed their 2011-12 property tax assessments to the St. Louis County Board of Equalization (County Board) claiming their assessments were discriminatory. Although Landowners conceded the property valuations were accurate and uniform within St. Louis County, they claimed the assessments were discriminatory because properties situated in Jefferson and Franklin Counties were allegedly systematically undervalued, causing Landowners to bear a "disproportionate share of the cost of operating" the multi-county taxing districts.

         The County Board upheld the assessments, and Landowners appealed their assessments to the State Tax Commission (Commission). The hearing officer dismissed the appeals. After reviewing the hearing officer's decision, the Commission affirmed the dismissal of Landowners' claims, reasoning that its authority is derivative of the County Board, which did not have authority over inter-county claims.

         Landowners filed a petition in the Circuit Court of St. Louis County seeking review of a contested case pursuant to section 536.100, RSMo Supp. 2013, [2] or, alternatively, of a non-contested case pursuant to section 536.150, RSMo 2000. The petition also sought a declaratory judgment that Landowners' assessments were discriminatory and that the Commission failed to carry out its duty to equalize property assessments as between counties.[3] See Mo. Const. art. X, sec. 14. The circuit court dismissed the petition with prejudice for failing to state a claim upon which relief can be granted.

         Landowners appealed and, after opinion, the court of appeals transferred the case to this Court pursuant to article V, sections 10 and 11 of the Missouri Constitution, [4]concluding the appeal presents matters of general interest and importance and raises issues within this Court's exclusive appellate jurisdiction. See Mo. Const. art. V, sec. 3.

         Analysis

         I. This Court Does Not Have Exclusive Appellate Jurisdiction of This Case

         The court of appeals transferred this case after concluding it lacked jurisdiction to decide the merits. It reasoned that the case involved the construction of revenue laws of the state, including: (1) article X, section 3 of the Missouri Constitution, which provides that taxes "shall be uniform upon the same class or subclass of subjects within the territorial limits of the authority levying the tax"; (2) article X, section 14, which establishes the Commission "to equalize assessments as between counties" and "to hear appeals from local boards"; and (3) certain statutes in Chapter 138 of the Missouri Revised Statutes outlining the duties and authority of the Commission.

         This Court, it is true, has exclusive jurisdiction of questions regarding the construction of revenue laws of the state. Mo. Const. art. V, sec. 3. And although construction of the provisions at issue here presents important matters with statewide ramifications, none of the provisions is a "revenue law of this state" as this Court has interpreted that phrase.

         A case involves the "construction of the revenue laws of this state" if it satisfies three separate elements: "(1) construction (2) of revenue laws (3) of this state." Alumax Foils, Inc. v. City of St. Louis, 939 S.W.2d 907, 910 (Mo. banc 1997). A "revenue law" is one that imposes, amends, or abolishes a tax or fee. Id. In other words, the law must "directly create[] or alter[] an income stream to the government." Id. Article X, section 3 imposes limitations and restrictions on how taxes may be levied by political subdivisions of the state. Article X, section 14 provides for the creation of the Commission and specifies its general powers and duties. Provisions in Chapter 138 provide the framework for the creation of ...


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