Document Sample
					                         OHIO BOARD OF TAX APPEALS

S. Sandy Satullo II and                     )      CASE NOS. 2003-M-2115; 2003-M-2116
Copper Kettle Marina, Inc.,                 )                2003-M-2128; 2003-M-2129
                    Appellants,             )                      (USE TAX)
              vs.                           )              DECISION AND ORDER
Thomas M. Zaino,                            )
Tax Commissioner of Ohio,                   ) Affirmed on Appeal Nov. 29, 2006
                                            )   Ohio Supreme Court
                    Appellee.               )

APPEARANCES:         111 Ohio St.3d 399, 2006-Ohio-5856

                         For the Appellants     - Wegman, Hessler & Vanderburg
                                                  Angela M. Privitera
                                                  Keith A. Vanderburg
                                                  6055 Rockside Woods Boulevard
                                                  Cleveland, Ohio 44131

                         For the Appellee       - Jim Petro
                                                  Attorney General of Ohio
                                                  Robert C. Maier
                                                  Assistant Attorney General
                                                  State Office Tower – 16th Floor
                                                  30 East Broad Street
                                                  Columbus, Ohio 43215-3428

      Entered December 9, 2005

Ms. Margulies, Mr. Eberhart, and Mr. Dunlap concur.

             The Board of Tax Appeals considers this matter pursuant to notices of

appeal filed by S. Sandy Satullo II and Copper Kettle Marina, Inc. (Mr. Satullo II is

sometimes referred to as "Satullo II" to differentiate him from his father, S. Sandy

Satullo. Copper Kettle Marina, Inc. is sometimes referred to as "Copper Kettle" and

both Satullo II and Copper Kettle are sometimes jointly referred to as "appellants").

Appellants have appealed from two final determinations of the Tax Commissioner
that assessed use tax against the appellants.1 The assessment against S. Sandy Satullo

II covers the use of two boats, a Sunseeker and an Azimut, from November 1, 1995

through October 31, 1999. The assessment against Copper Kettle Marina, Inc. covers

the use of the Sunseeker and the Azimut from November 1, 1995 through October 31,

1998. The final determinations and notices of appeal are incorporated by reference.

                The matter has been submitted to the Board of Tax Appeals upon the

notices of appeal, the statutory transcripts certified by the Tax Commissioner, the

evidence adduced at the hearing conducted herein contained in the September 15,

2004 hearing record (R.I), the September 16, 2004 hearing record (R.II), and the

briefs filed by counsel for the parties. At the hearings, Mr. Satullo II testified and

appellants also presented the testimony of Shirley Satullo, Mr. Satullo II's former

wife, and Robert McFarlin and George H. Shaffer, both officers of Copper Kettle and

involved in various enterprises run by the Satullo family.

                The board finds support in the record for the following facts. Copper

Kettle was established by Mr. Satullo II's father, S. Sandy Satullo, in the mid-1970s.

R.I 246-247. The business began selling Wellcraft boats after Mr. Satullo II's father

developed a relationship with the president of Wellcraft Marine Corporation, a boat

manufacturer. R.I 247.          Unlike other boat dealers who sold boats purchased on

consignment or pursuant to a floorplan arrangement, Mr. Satullo II's father began his

business by purchasing boats without financing and then purchasing more only after

  The appeals have been consolidated from two final determinations of the Tax Commissioner. One final
determination is against S. Sandy Satullo II personally and has been docketed as BTA Nos. 2003-J-2115 and
2003-J-2129. The other final determination is against Copper Kettle Marina, Inc. and has been docketed as
BTA Nos. 2003-J-2116 and 2003-J-2128. The board mistakenly docketed each appeal twice.

the purchased boats were sold. R.I 249. As sales of the Wellcraft line increased, Mr.

Satullo II's father expanded his business efforts and acquired the waterfront property

on which Copper Kettle was located. R.I 248.

             The success of the company did not alter Copper Kettle's sales

approach. Rather than maintain an inventory of boats, Satullo II's father would

purchase one boat at a time, and sell it before ordering another one. R.I 249. The

business expanded in the 1980s and Copper Kettle took on other lines of boats. R.I

250-251.   With each new line Copper Kettle maintained the same conservative

approach. R.I 251. The conservative strategy proved successful, with Copper Kettle

becoming one of the top ten dealers of Wellcraft boats by the late 1980s, selling 100

to 150 new boats per year and employing approximately 53. R.I 139-142.

             In the 1980s, the ownership at Wellcraft Marine Corporation changed

and, according to Mr. Satullo II, the quality of the product deteriorated. Sometime

after the hiring of George Shaffer as president of Copper Kettle in the late 1980s,

sales began to decline. R.I 147. By the early 1990s, Wellcraft boats were not selling.

When sales slowed, the workforce was reduced, from a high of 53 employees to, at

the time of the hearing, 7. In 1993, Copper Kettle terminated its dealership agreement

with Wellcraft. R.I 256.

             Mr. Shaffer testified that despite overall declining sales in the boat

industry and despite the imposition of a federal luxury tax, it was his impression

during the early 1990s that sales of boats 45 feet and larger could be an area of

potential growth. R.I 148, 203-204. Boats over 45 feet in length were discussed at

hearing as "luxury" boats, distinct from the Wellcraft boats, the largest of which

ranged from 34 feet to 50 feet.

              In 1995, a 55-foot Sunseeker was purchased. The seller was Hideaway

Yacht Group in Pompano Beach, Florida.           The purchase price of the boat was

$750,000. While Mr. Satullo II testified that Copper Kettle purchased the boat as a

sub-dealer for Hideaway Yacht Sales, R.I 259, no dealership agreements were

presented. The purchase and sale agreement identifies Mr. Satullo II's father as the

purchaser of the vessel, but the buyer's signature appears to be Mr. Satullo II's.

Compare signature on S.T. 2003-M-2116, 305, admitted at hearing to be Mr. Satullo

II's signature, R.I 327, with S.T. 2003-M-2116, 313. The bulk of the $750,000

purchase price was paid through two personal checks drawn on Mr. Satullo II's

father's account. S.T. 2003-M-2116, 309, 310. Robert McFarlin, Copper Kettle’s

vice-president, signed the order acknowledgement for the Sunseeker, dated November

19, 1995. R.I 52.

              No sales tax was paid to the state of Florida. The record contains a copy

of the sales tax exemption affidavit prepared for the state of Florida indicating that the

Sunseeker was purchased by a non-resident and intended to be taken from the state of

Florida. S.T. 2003-M-2116, 341-342. On that document, signed by Satullo II, the

purchaser of the Sunseeker was identified as "Sandy Satullo/Copper Kettle Marina."

The record also includes a second sales tax exemption affidavit, this one indicating

that the Sunseeker was purchased for resale. This affidavit was also signed by Satullo

II and was notarized on January 22, 1998, some three years after the actual purchase

of the vessel. Compare date of sales tax exemption affidavit, S.T. 2003-M-2116, 344,

with date of purchase and sales agreement, S.T. 2003-M-2116, 348.

             The Sunseeker was sailed to Ohio from Florida with McFarlin, Satullo

II, and a captain on board. According to both McFarlin and Mr. Satullo II, the trip

was made in three days, stopping only for fuel and darkness. R.I 60, 260-261.

             According to testimony and evidence in the record, the Sunseeker was

trucked back to Florida in the fall of 1996. The boat was back in the Cleveland area

in 1997, as evidenced by invoices for cleaning and shrink-wrapping performed by a

company in Vermilion, Ohio. S.T. 2003-M-2115, 335, 337, 339, 341, 342. The

record also contains a receipt for the dismantling and disassembly of the boat in

Cleveland in September 1997 and the reassembly of the boat in Pompano Beach,

Florida. S.T. 2003-M-2115, 117.

             According to Mr. Satullo II, at all times the boat was being

demonstrated for sale. This statement was made despite the information relayed to

the appellants' insurance carrier that the use of the boat would be for pleasure. S.T.

2003-M-2116, 241, 242. The places the Sunseeker was displayed were not typical

locations for a boat to be shown for sale, but were either private marinas or places

where the general public had limited access. For example, Mr. McFarlin testified that

the boats were docked at LeMarin, Rattlesnake Island, and the Shoreby Club. R.I 84,

85. The Sunseeker was not shown at boat shows in either Ohio or Florida, even

though Mr. Satullo II testified that he attended the Miami Boat Show in February


                At the February 1998 boat show in Miami, Mr. Satullo II met with the

president of Azimut. R.I 274. According to Mr. Satullo II's testimony, the president

of Azimut insisted that if he would not become a dealer by purchasing a number of

boats, then he would have to purchase one through an established dealer. R.I 274-

275. However, the record includes a copy of a $450,000 check made out to Richard

Bertram, Inc., the seller of the Azimut to Copper Kettle, dated December 18, 1997,

before the February 1998 Miami boat show. S.T. 2003-M-2116, 355 The record also

includes an undated copy of the Azimut Seajet ("Azimut") purchase invoice, S.T.

2003-M-2116, 209, 210, and copies of checks directed to Richard Bertram, Inc., the

seller of the Azimut. S.T. 2003-M-2116, 356. All three checks used to pay the

Azimut's purchase price were drawn on the accounts of, or on behalf of, Mr. Satullo

II's father.

                Also reflected on the second page of the invoice for the Azimut is a

trade-in amount of $645,523.              Documents within the record indicate that the

Sunseeker was sold from Copper Kettle to Richard Bertram, Inc. on January 22, 1998.

S.T. BTA 2003-M-2117, 368. Mr. Satullo II also testified that the Sunseeker was

traded as part of the transaction to purchase the Azimut. R. I 306. The invoice does

not reflect the collection of sales tax on the purchase.

 . Satullo II did testify that the Sunseeker had blown an engine in August 1997. However, Satullo II also
testified that the boat was repaired and ready for showings in December 1997. R. 2003-J-2115, 273-274.

              Like the Sunseeker in 1996 and 1997, the Azimut was brought to Ohio

during the summer of 1998. R.I 279. The Azimut was eventually sold through Allied

Marina. R.I 304.

              The Tax Commissioner assessed use tax, penalties and interest upon the

use of both boats in Ohio. The appellants argue that the assessments are improper.

The appellants argue that Satullo II was not a consumer as defined by R.C.

5741.02(B). Appellants' brief at 12. The appellants further argue that even if Satullo

II meets the definition of a "consumer," his use should be deemed to be "transient

use," exempt from the imposition of use tax under R.C. 5741.02(C). The appellants

do not claim that Copper Kettle did not meet the definition of "consumer" for use tax

purposes. However, the appellants argue, as both boats were purchased with the

intent to resell, the transactions fall under the sales tax exception found in R.C.

5739.01(E)(1), and thus, neither Copper Kettle nor Satullo II should be found to be

liable for the use tax imposed.

              The appellants also make a number of alternative arguments against

taxation. Should either Mr. Satullo II or Copper Kettle be found to be the consumer

of the boats within Ohio and subject to no exemption, then, appellants argue, the

"price" upon which the tax is imposed should be the value of the temporary use in


              The appellants also claim that any imposition of tax upon the purchases

of the two boats places an undue burden upon interstate commerce, and thus, should

be found to be constitutionally discriminative. Finally, the appellants challenge the

imposition of preassessment interest and penalties.

              There is a statutory presumption that every sale and use of tangible

personal property in this state is taxable, and it is well settled that the laws relating to

the exemption from taxation are to be strictly construed. Highlights for Children, Inc.

v. Collins (1977), 50 Ohio St.2d 186, 190; National Tube Co. v. Glander (1952), 157

Ohio St. 407, 409. The burden of establishing the right to exemption is upon the

taxpayer. Frankelite Company v. Lindley (1986), 28 Ohio St.3d 29, 33. The court

stated in Alcan Aluminum Corp. v. Limbach (1989), 42 Ohio St.3d 121, 124:

              "Absent a demonstration that the commissioner’ findings
              are clearly unreasonable or unlawful, they are
              presumptively valid. Furthermore, it is error for the BTA
              to reverse the commissioner’ determination when no
              competent and probative evidence is presented to show
              that the commissioner’ determination is factually

It is therefore incumbent upon a taxpayer challenging a finding of the Tax

Commissioner to rebut the presumption of validity which attaches to the

commissioner’ findings, and establish a clear right to the relief requested. Belgrade

Gardens v. Kosydar (1974), 38 Ohio St.2d 135; Midwest Transfer Co. v. Porterfield

(1968), 13 Ohio St.2d 138. The taxpayer is assigned the burden of showing the

manner in which and the extent to which the Tax Commissioner’ determination is in

error. Federated Dept. Stores, Inc. v. Lindley (1983), 5 Ohio St.3d 213.

              The commissioner’ order is predicated upon circumstances which he

found were inconsistent with the appellants' claim that the use of the boats in Ohio

should not be subject to tax. The Tax Commissioner's agent, in performing his duties

to assure that the tax laws of the state of Ohio are satisfied, was in receipt of a boat

registration form from LeMarin, a housing community with dock space for

homeowners, indicating an "S. Sandy Satullo II" was the owner of a Sunseeker named

the Crowned Eagle. The registration indicates that the Sunseeker was not registered

in Ohio. S.T. 2003-M-2116, 127. Based upon this information, the agent sought a

copy of the purchase agreement, a copy of the Ohio title and a copy of the sales tax

receipt issued by the Ohio Department of Taxation regarding the Sunseeker. The

letter attempting to obtain this information clearly stated that if the vessel had been

purchased outside Ohio from one other than a dealer, proof of sale documents were

acceptable. This letter was mailed to Mr. Satullo II at the address listed on the

LeMarin boat registration form. Compare S.T. 2003-M-2116, 122 with 127. In

response to this letter, the agent received the following statement from Satullo II:

              "I neither currently own nor have ever owned the above
              referenced [55 foot Sunseeker] boat." S.T. 2003-M-2116,

              In fact, the Tax Commissioner's agent did not ask Mr. Satullo II whether

he owned the Sunseeker, but instead sought certain information concerning the boat's

ownership. The agent's further research as well as the two-day hearing before this

board leads this board to conclude that Mr. Satullo II had within his control

information regarding the ownership of the boats in issue. The board further finds

that Mr. Satullo II exercised sufficient indicies of ownership necessary for a finding of

personally liability for use tax to the state of Ohio.

              R.C. 5741.02 provides in part:

              "(A) *** [A]n excise tax is hereby levied on the storage,
              use, or other consumption in this state of tangible personal
              property of the benefit realized in this state of any service
              provided. * * *

"Use" is defined by R.C. 5741.01(C) as "the exercise of any right or power incidental

to ownership of the thing used." In Louisville Title Agency for N.W. Ohio v. Kosydar

(1975), 43 Ohio St. 2d 109, the Supreme Court upheld a use tax levy on a boat docked

in Ohio for repairs and installation of new equipment because the docking of the boat

constituted an exercise of a right or power incidental to the ownership. In Waydo v.

Tracy (Apr. 28, 1995), BTA No. 1993-S-738, unreported, this board held that storage

within Ohio for a three-month period satisfied the "use" requirement. In Central

Transport, Inc. v. Tracy (1995), 72 Ohio St. 3d 296, the court concluded that

unloading, unwrapping and inspecting of items were all indicia of ownership of the

property sufficient to levy use tax upon the use of the property within the state.

              As the above-cited cases indicate, minimal activities within the state are

required to meet the R.C. 5741.01 "use" definition. The record before this board

contains sufficient evidence of ownership taking place within the state to meet this

minimal standard. The initial documentation obtained by the Tax Commissioner's

agent regarding LeMarin dockage is an indicia of ownership.               The testimony

presented by Mr. Satullo II's former wife that she was present on the Sunseeker when

it was docked at the Shoreby Club and on both the Sunseeker and the Azimut with the

vice president of Copper Kettle and/or her ex-husband when the boats were in Lake

Erie, are all indicia of ownership exhibited by Copper Kettle and Mr. Satullo II. The

evidence in the record indicating that the boats were washed, waxed and shrink-

wrapped in Ohio also indicate a use of the boats within the state. Therefore, the board

finds sufficient evidence of ownership necessary for the state to impose use tax upon

the use of the boats in Ohio.

              Use tax is assessed upon the consumer of tangible personal property

within the state. R.C. 5741.02(B) states:

              "Each consumer, storing, using or otherwise consuming in
              this state tangible personal property or realizing in this
              state the benefit of any service provided, shall be liable for
              the tax ***."

Consumer is defined by R.C. 5741.01(F) to mean:

              "[A]ny person who has purchased tangible personal
              property or has been provided a service for storage, use, or
              other consumption or benefit in this state."

              A "purchase" occurs, pursuant to R.C. 5741.01(D), when there has been

a transfer of title or possession or a license has been granted to use a certain property.

Waydo, supra. While the record contains conflicting evidence as to who is the actual

titled purchaser of the property, the board finds that Copper Kettle was the titled

owner of the boats, but Mr. Satullo II had both possession and a license to use the

boats within the state of Ohio. These findings are sufficient to bring both appellants

within the gambit of R.C. 5741.02.

              Therefore, we now turn to the appellants' claims regarding exemption

from taxation. Exemptions and exceptions to the imposition of sales tax also apply to

the imposition of use tax. R.C. 5741.02(C)(2). The most common exception to the

collection of sales tax is known as the "retail sale" exception. R.C. 5739.01(E)

exempts from the collection of tax sales in which the purpose of the "consumer" is:

              "(1) To resell the thing transferred or benefit of the service
              provided, by a person engaging in business, in the form in
              which the same is, or is to be, received by him; ***."

The board notes that if there is evidence of personal use of the boats in question, it

does not necessarily defeat the exception from tax, if the primary use of, or primary

purpose of, the purchases was for resale. Foxhaven Marina, Inc. v. Tracy (Sept. 20,

1996), BTA No. 1995-J-657, unreported. In that case the appellant purchased a yacht.

At the time of purchase, the purchaser, Foxhaven Marina, did not have a dealer’s

license. The boat was listed for sale on the marina’ bulletin board. It was displayed

at other clubs and demonstrated on several occasions. There was no evidence of

personal use of the boat, except for an inference raised by the Tax Commissioner’s

agent, based upon one trip by the marina’ manager and his wife to Put-In-Bay.

However, on that trip the boat was tied up at a club and a sale sign was displayed.

                 In contrast to Foxhaven Marina, Inc. is Osborne v. Tracy (Dec. 23,

1994), Lake App. No. 93-L-200, unreported. In that appeal, an entrepreneur with

multi-faceted business interests began to buy and sell small motor boats with the

intent of maintaining a business as a boat dealer. He did not have much success and

never became the exclusive dealer for any boat manufacturer.

              In 1986, the entrepreneur purchased a 90-foot yacht in Florida, and

brought the yacht to the Mentor area where it was docked at a local yacht club. The

entrepreneur did not pay sales tax in Florida or use tax in Ohio, in both cases claiming

exemption from taxation under the "sale for resale" exemption.

              This board found the entrepreneur's primary purpose for purchasing the

yacht was for recreation and other personal uses. The Lake County Court of Appeals

agreed. The entrepreneur had used the boat to live on in Florida and hosted his

daughter’ wedding on the boat in Ohio. While the entrepreneur argued that these

uses were secondary to his original intent to resell the vessel for profit, the court held:

              "[A]lthough appellant testified that he had taken certain
              steps to sell the yacht, he was unable to set forth any
              documentation supporting this assertion. In addition, the
              examiner heard testimony which indicated that when
              appellant was asked by appellee's agent to demonstrate
              that the yacht had been purchased for business reasons, he
              could not establish that the transaction had been
              documented upon his business records. Based upon this,
              the board could reasonably conclude that his testimony as
              to his efforts to resell the yacht was not credible.

              "Given appellant's failure to substantiate his assertions, the
              board’ finding as to his primary motive was not against
              the manifest weight of the evidence. Thus, since the
              purchase of the yacht would not be exempt from the sales
              tax, the yacht itself is not exempt under R.C.
              5741.02(C)(2).” Id. at 7, 8.

              Like the entrepreneur in Osborne, appellants cannot support their claim

that the boats in issue were purchased for resale. Copper Kettle was not a dealer for

any boat line at the time of purchase and has provided no tangible evidence of

proposed dealership agreements or sub-dealership agreements with any manufacturer.

The purchases were not consummated as if the boats were intended to be a part

Copper Kettle's inventory. The boats were purchased from established boat retailers

and excluded from personal property tax returns.         According to the insurance

documents, the boats spent one-half year in Florida waters and one-half year in the

Great Lakes area. Mr. Satullo II's racing and horse show schedules also appear to be

heavily weighted to the Midwest during the summer months.               One insurance

communication suggests that the "insured" intended to visit "his mother" in Naples,

Florida, another indication of personal use. S.T. 2003-M-2116, 276.

              The appellants attempt to explain the movement of the boats by arguing

that the boats were being shown for sale in the Great Lakes area during the summer

months. However, no tangible evidence of sales literature was presented, despite

testimony presented regarding flyers and brochures. The locations at which the boats

were supposedly marketed were not locations generally known for retail transactions,

but were private docks and clubs. Even though Mr. Satullo attended the Miami boat

show in 1998, the Sunseeker was not offered for sale (most likely because a trade of

the Sunseeker had already been negotiated into the December 1997 purchase of the


              Some of appellants' excuses strain credulity. The appellants' excuse for

not reporting the boats on Copper Kettle's personal property tax reports, that the boats

were not in Ohio at the time the returns were prepared, is not persuasive. The cost of

the boats is significant in comparison to the other assets reported Compare personal

property tax return submitted to Tax Commissioner's agent, S.T. 2003-M-2116, 169,

with actual return filed with the Lorain County Auditor, S.T. 2003-M-2116, 383.

Thus, it seems unlikely that such assets could simply be overlooked.              More

importantly, business assets are booked at the time of purchase, not at the time the

personal property tax return is prepared.

              Even more questionable is the inconsistency between the evidence

presented by appellants and the evidence obtained from other sources. The record

contains a copy of the invoice from Richard Bertram Yachts, originally presented to

the Tax Commissioner's agents by the appellants, which indicated a purchase price of

$2,418,709, a trade-in allowance of $645,523 and a dealer discount of $450,000. S.T.

2003-M-2116, 209-210. It must be noted, however, that the second page of the

invoice is provided on a different form and in different type from the first. Compare

209 to 210. It also must be noted that the record contains a copy of a check to

Richard Bertram, Inc. for $450,000, the exact amount of the "dealer discount." That

check, drawn on Mr. Satullo II's father's account, was dated December 18, 1997. S.T.

2003-M-2116, 355.

              Finally, the Sunseeker logged 357 hours of sailing time during its two

years of ownership by appellants. In McCleary v. Limbach, (Oct. 18, 1991), BTA No.

1989-E-748, unreported, this board concluded that sailing time of 30 hours over 40

months of ownership supported a finding that a boat was held for resale and not for

personal use. If the limited personal use of a boat indicates intent to resell, then the

corollary, extensive personal use of a boat, may evidence an intent to use the boat for

personal enjoyment.

              As to the appellants' alternative arguments against taxation, we find

none compelling. Appellants argue that Mr. Satullo II's use of the boats within Ohio

should be subject to the exemption provided for transient use. R.C. 5741.01(C)(4)

provides that the tax does not apply to:

                 "Transient use of tangible personal property in this state
                 by a nonresident tourist or vacationer, or a non-business
                 use within this state by a nonresident of this state, if the
                 property so used was purchased outside this state for use
                 outside this state and is not required to be registered or
                 licensed under the laws of this state."

We first note that Copper Kettle cannot avail itself of this exemption, as it is a

resident corporation. Osborne v. Tracy (Nov. 12, 1993), BTA No. 1991-D-1283,

unreported, affirmed, supra. As to Mr. Satullo II, the appellants argue that he is not

an Ohio resident. However, the board does not find that claim to be supported by the

record. Mr. Satullo II did not testify to his residence at hearing. The insurance

records indicate a change of "assured's" address to 5425 Naiman Parkway, Solon,

Ohio.3 S.T. 2003-M-2116, 268. This address is the same as the address originally

provided by Mr. Satullo II to LeMarin. S.T. 2003-M-2116, 127. Mr. Satullo II's wife

testified that Mr. Satullo II lived in Florida. R.I 27. However, she could not provide a

residence address for her ex-husband. R.I 33. Without more evidence, the board

finds that the insurance and boat dockage information are sufficient for us to conclude

that appellants did not prove Mr. Satullo II's residence was outside Ohio. Therefore,

we find the transient use exemption not applicable.

                 Appellants next argue that the imposition of tax upon the appellants' use

of the boats in Ohio violates the United States Constitution, as it imposes an undue

  While Mr. Satullo II, his father and Copper Kettle were all assureds on the insurance policy, Copper Kettle's
address is provided through its personal property tax reports and there is no indication that Mr. Satullo II's
father was at any pertinent time residing in Ohio.

burden on interstate commerce. The appellants cite Complete Auto Transit, Inc. v.

Brady (1977), 430 U.S. 274 in support of this claim.

              The four-part "undue burden" test, set forth in Complete Auto Transit,

Inc., requires that a tax must not (1) apply to an activity without a substantial nexus

with the taxing state, (2) be unfairly apportioned, (3) discriminate against interstate

commerce, and (4) be unfairly related to the services provided by the state. Big Boy's

Toy, Ltd. v. Limbach (1992), 64 Ohio St.3d 448, 450.

              This board applied the Complete Auto Transit, Inc. test to use tax

imposed upon the use of boats within Ohio waters both in Big Boy's Toy, Ltd. v.

Limbach (Determination after Remand, Nov. 13, 1993), BTA No. 1989-H-648,

unreported, and Osborne v. Tracy, supra. In both cases, this board determined that

dockage, storage and repair of a boat in Ohio was substantial nexus sufficient to

impose use tax. We reach the same conclusion herein. Both boats spent significant

time in Ohio waters. Both boats were cleaned, stored, and traveled upon in Lake Erie.

Thus, the Complete Auto Transit, Inc. test is met.

              Finally, the appellants argue that the imposition of penalties and

preassessment interest is improper. Ordinarily, a taxpayer must show an abuse of

discretion on the part of the Tax Commissioner before the commissioner's

determination is reversed or modified by this board. See Columbia Gas of Ohio, Inc.

v. Limbach (1995), 69 Ohio St.3d 462; Interstate Motor Freight System v. Bowers

(1960), 170 Ohio St. 483.      An abuse of discretion connotes a decision that is

unreasonable, arbitrary or unconscionable. Jennings & Churella Construction Co. v.

Lindley (1984), 10 Ohio St.3d 67. See, also, Frankelite Co. v. Lindley (1986), 28

Ohio St.3d 29.

                   The board does not have the ability to merely substitute our judgment

for that of the commissioner. If the appellant has not provided evidence of abuse of

discretion, the commissioner’ finding must stand. EAH Corp. v. Tracy (May 21,

1999), BTA No. 1997-T-1399, unreported. We find no such evidence in this record.

                   Upon consideration of the entire record, the board finds by a

preponderance of the evidence that the appellants have failed in their burden to prove

error on the part of the Tax Commissioner. Therefore, the final determinations are