The Missouri Supreme Court issued an opinion February 14, 2024, ruling in favor of St. Louis County Assessor Jake Zimmerman in a property tax discrimination case involving thousands of commercial property owners. The court vacated a circuit court judgment and reinstated the Missouri State Tax Commission's decision denying discrimination claims filed by Crown Diversified Industries Corp. and 2,624 other commercial property owners.
The case, *Crown Diversified Industries Corp. v. Jake Zimmerman*, centered on allegations that the assessor assigned discriminatory assessments to commercial properties during the 2017 assessment cycle. The commercial property owners, referred to as "Taxpayers" in the opinion, claimed their properties were assessed at a greater percentage of fair market value than other St. Louis County commercial properties, creating a disproportionate property tax burden.
The commercial property owners did not allege intentional discrimination. Instead, they pursued what is known as a "ratio discrimination" claim, arguing that systematic differences in assessment ratios violated equal treatment principles under Missouri tax law. This type of claim focuses on statistical disparities in how similar properties are valued rather than deliberate bias.
The dispute originated when the 2,625 commercial property owners filed discrimination claims with the State Tax Commission following the 2017 assessment. During that assessment cycle, the St. Louis County Assessor's office used a Computer Assisted Mass Appraisal system, known as CAMA, to help determine property values across the county.
The State Tax Commission initially denied the taxpayers' discrimination claims, finding that the evidence did not support their allegations of systematic unfair treatment. The commission determined that its decision was supported by substantial and persuasive evidence regarding the assessment practices used by the assessor's office.
However, the St. Louis County Circuit Court, presided over by Judge Brian H. May, reversed the State Tax Commission's decision. The circuit court ruled in favor of the commercial property owners and remanded the case for retrial on the discrimination claims. This reversal prompted the assessor to appeal the decision to the Missouri Supreme Court.
The Missouri Supreme Court's opinion addressed several key legal issues beyond the underlying discrimination claims. The court examined whether the State Tax Commission properly handled discovery disputes that arose during the proceedings. The commission had denied certain discovery requests made by the commercial property owners and quashed subpoenas seeking depositions of the assessor and several staff appraisers.
The supreme court found that the State Tax Commission did not abuse its discretion in limiting discovery. The court determined that the commission's restrictions on depositions and document production were reasonable and within its authority to manage the proceedings effectively.
In its analysis, the Missouri Supreme Court emphasized that the State Tax Commission's original decision denying the discrimination claims was "authorized by law and supported by substantial and persuasive evidence." This finding suggests the court reviewed the underlying record and determined that sufficient factual support existed for the commission's conclusion.
The case highlights the complex nature of property tax assessment disputes, particularly when they involve large numbers of properties and allegations of systematic discrimination. Commercial property owners face significant challenges in proving ratio discrimination claims, as they must demonstrate statistical disparities in assessment practices across comparable properties.
Property tax assessment systems like the CAMA system used in St. Louis County are designed to provide consistent and fair valuations across large numbers of properties. These computer-assisted systems help assessors handle the massive task of valuing thousands of properties annually while maintaining consistency in methodology.
The Missouri Supreme Court's decision reinforces the substantial evidence standard that applies to State Tax Commission rulings. Under this standard, courts will uphold commission decisions when they are supported by sufficient evidence, even if other reasonable interpretations of the evidence might be possible.
The ruling also clarifies the scope of discovery rights available to taxpayers challenging assessment practices. While property owners retain the right to seek relevant information about assessment methods, the State Tax Commission maintains discretion to limit discovery that may be overly burdensome or not directly relevant to the discrimination claims.
For the 2,625 commercial property owners involved in this case, the supreme court's decision represents the end of their legal challenge to the 2017 assessments. The court's decision to reinstate the State Tax Commission's original denial means their discrimination claims have been definitively rejected.
The case serves as a reminder that successful property tax discrimination claims require substantial evidence of systematic unfair treatment. Property owners considering similar challenges must be prepared to present compelling statistical evidence demonstrating that their properties were assessed disproportionately compared to similar properties in their jurisdiction.
The Missouri Supreme Court concluded its opinion by issuing a brief directive under Rule 84.14, vacating the circuit court's judgment and reinstating the State Tax Commission's decision and order. This procedural ruling effectively returns the case to its original resolution, with the discrimination claims denied and the 2017 assessments standing as issued by the St. Louis County Assessor's office.