Washington state - boat tax and temporary use permits

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Nick14

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We're about to move to Portland OR and are bringing our boat with us from the east coast, and I've been wrestling with trying to figure out how to be able to spend as much time cruising Puget Sound without running into the rapacious Washington state tax.

In reviewing the information on-line, it seems that a 60 day temporary use permit is possible. But, is my understanding correct that this can be renewed twice, to allow up to 6 months of use on Washington waters in any 12 month period:

Use of Vessels in Washington by Nonresidents – Use Tax Chapter 82.12 RCW
Both domestic and foreign nonresidents may use their vessels in Washington for up to 60 days during any continuous 12-month period without incurring a use tax liability. RCW 82.12.0251(1).
Domestic nonresident individuals may use their vessels in Washington for up to 6 months during any continuous 12-month period without incurring a use tax liability. To qualify for this six-month exemption period, the watercraft must be issued a valid number under federal law or by an approved authority of the state of principal operation, be documented under the laws of a foreign country, or have a valid United States customs service cruising license. The watercraft must also satisfy all identification requirements under RCW 88.02.030 for any period after the first sixty days. Failure to meet the applicable documentation and identification requirements will result in a loss of the exemption.
A use tax exemption is also available to domestic and foreign nonresident individuals who acquired a vessel of 30 feet or longer outside Washington and purchase a one-year use permit from a licensed vessel dealer within 14 days of first entering the state with the vessel. The vessel must be removed from this state before the use permit expires and may not return to this state for 24 months after the expiration of the use permit. RCW 82.12.700.

If this is the case, and it's possible for an out-of-state resident to get up to 6 months of use in Washington without incurring the wrath of the tax demons, it opens up possibilities of keeping our boat on Puget Sound for half the year, and then bringing it back home to Portland for the rest of the time.

Does anyone here have any experience doing this, or first-hand knowledge of these regulations?

Thank you!
 
We're about to move to Portland OR and are bringing our boat with us from the east coast, and I've been wrestling with trying to figure out how to be able to spend as much time cruising Puget Sound without running into the rapacious Washington state tax.

Thank you!

Simple, cruise WA for a month or two and then go into BC where there is just as much or more to see and do. If you are into it keep heading North into AK. I've seen a few ATs up there. ;) Does the boat have diesel heat?

Don't fret about WA issues, they can be avoided with your throttle and gear shift.

Buy Waggoners Cruisng Guide, it will tell you all the places to go and how to clear Customs.
 
We're about to move to Portland OR and are bringing our boat with us from the east coast, and I've been wrestling with trying to figure out how to be able to spend as much time cruising Puget Sound without running into the rapacious Washington state tax.

In reviewing the information on-line, it seems that a 60 day temporary use permit is possible. But, is my understanding correct that this can be renewed twice, to allow up to 6 months of use on Washington waters in any 12 month period

If you're thinking that most of your boats use will be in Puget Sound and North, why don't you just license it in Washington to begin with. You don't have to deal with the hassle of trying to skirt the law and when you take it back to Portland, keep it in a Vancouver marina on the Washington side of the border. The annual boat license is fairly cheap here, mine is around $200 per year and you don't pay property tax on it. If you already paid home state taxes on your boat you should be golden here.
 
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Washington will collect 7% of your boats aprasied value

if your boat appraises at $300K thats $21,000 in tax the OP is trying to avoid.

In my opinion he is not doing anything wrong by trying to avoid the tax.

Just follow the rules and you'll be good to go. Get the permits you need for the time you are in Washington and leave it at that.

Part of the challenge you face is that if you have annual moorage in Washington it is probably for tax purposes assumed that the boat is taxable in Washington. You better check on that.

The poster that questioned your living in Portland or Vancouver Washington has a point, but it doesn't always work out that way. If you try to avoid tax by living in Vancouver and working in Portland you can end up owing Oregon tax anyway. States generally tax based on where the money is earned. If you earn it in Oregon you could have to pay Oregon tax anyway.
 
Thousands of Washington and Oregon residence cross the border every day to work in the other state. It's a bigger issue for income tax than sales tax. Assuming the OP moves to Oregon, but uses his boat primarily in Washington's Puget Sound, keeping his boat in Washington would be his best option. He can still bring it back to the Portland area, Columbia River, in the off season and keep it on the Washington side of the river.

It will be especially critical now with the enactment of new legislation governing marina reporting to the Department of Revenue. We have many boats in our marina with Oregon, California, and BC owners.

If he purchased his boat in a sales tax state, then he is allowed to offset the Washington Use Tax by the amount of sales tax he paid in his home state.


Exemptions
Persons who are residents of another state and move to Washington are exempt from use tax on their household goods, personal effects, and motor vehicles if they acquired the property more than 90 days prior to moving to Washington.

Boats, motor homes, trailers, and other recreation vehicle equipment do not qualify as motor vehicles or personal effects. These items are subject to use tax, even if acquired more than 90 days prior to moving to Washington. A credit in the amount of tax paid on the item can be used to offset the amount of Washington use tax owed. Proof of previously paid tax must be provided.
 
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Washington will collect 7% of your boats aprasied value

if your boat appraises at $300K thats $21,000 in tax the OP is trying to avoid.

In my opinion he is not doing anything wrong by trying to avoid the tax.

Just follow the rules and you'll be good to go. Get the permits you need for the time you are in Washington and leave it at that.

Part of the challenge you face is that if you have annual moorage in Washington it is probably for tax purposes assumed that the boat is taxable in Washington. You better check on that.

The poster that questioned your living in Portland or Vancouver Washington has a point, but it doesn't always work out that way. If you try to avoid tax by living in Vancouver and working in Portland you can end up owing Oregon tax anyway. States generally tax based on where the money is earned. If you earn it in Oregon you could have to pay Oregon tax anyway.

You can avoid it by mooring it in OR. If you moor it in WA for more than 30-days, the moorage operator in WA is required to report it to the WA Dep't of Revenue........so be careful.
 
Kevin, thank you, you're absolutely correct in what I am seeking.

Not to turn this into a tax or political thread (heaven forbid), I don't mind paying taxes - we're moving to Oregon, a 10% income tax state, from Delaware which has no income or sales tax. But, I'm funny about taxes. I want to be in the jurisdiction that taxes me, and to have a say in who is levying those taxes on me, and what they're going to use my money for. As an Oregon resident, I can't vote for Washington legislators, and have no say in how they would spend my tax money.

Delaware has no sales tax, so there's nothing to 'credit' to another state. The full freight Washington sales tax on the boat would be prohibitive to us as a just-retired couple. I don't ever want to 'evade' any taxes, just explore ways to legally avoid them so we can spend the money on fuel instead of another jurisdictions taxes.

If my reading of the regulations is accurate, and it's possible to legally spend 6 mos a year in Washington waters with the renewable cruising permits, that would be ideal for us. Going back and forth between Portland and Puget Sound a couple of times a year would be part of the fun. I was curious if anyone else here has done something similar, legally spending 6 mos a year on Puget Sound while living elsewhere.

Thanks again everyone.
 
Going back and forth between Portland and Puget Sound a couple of times a year would be part of the fun. I was curious if anyone else here has done something similar, legally spending 6 mos a year on Puget Sound while living elsewhere.

OK, understand that you are between a rock and a hard spot. But stay away from the Use Tax Exemption permit. If you apply for a tax Exemption permit, you won't be able to return to Puget Sound a "couple times a year."

"The vessel must be removed from this state before the use permit expires and may not return to this state for 24 months after the expiration of the use permit."

Like another poster mentioned. . be really really careful. Oregon and Washington have reciprocity agreements and work together to combat tax fraud. You don't want to fall into that trap. The penalty is twice the tax due, plus fees.
 
My reading of the regulations was that the 24 mos 'no return' was for boats that wanted a 1 year exemption. My thoughts were to use the 60 day exemption with the two possible renewals, for a total of 6 mos in any 12 mos period.
My other thoughts for going back and forth was to go up in the spring and back in the fall. It sounds like others haven't done that, maybe I'll be blazing a bit of a trail.
 
When we first acquired our boat and had it trucked up from California, we had to sublease slips for two years before our name got to the top of the waiting list for 40' slips. Both winters we sublet from a fellow who kept his Ocean Alexander in Bellingham for six months and then moved it to Sidney, BC for six months. He actually lived in Oregon.

This arrangement seemed to suit him very well for the two years we did this. Not long after we got our own slip we noticed that he was no longer in the marina in the summer (or winter) so I have no idea what kind of arrangement he moved on to.
 
If you're thinking that most of your boats use will be in Puget Sound and North, why don't you just license it in Washington to begin with. You don't have to deal with the hassle of trying to skirt the law and when you take it back to Portland, keep it in a Vancouver marina on the Washington side of the border. The annual boat license is fairly cheap here, mine is around $200 per year and you don't pay property tax on it. If you already paid home state taxes on your boat you should be golden here.
That last is the critical information. WA does not require you to pay use tax if you already paid excise tax out of state, so if you did, then you just need to bring evidence of that to any county assessor's office and you'll be able to get what you need to avoid hassles. Going forward, there is a 1/4 of 1% of value fee that you would pay annually. Since you wouldn't be here all the time, there may be a way to adjust that, but you aren't talking about a lot of money. For a county that is really easy to deal with, Skagit county is the one.
 
That last is the critical information. WA does not require you to pay use tax if you already paid excise tax out of state, so if you did, then you just need to bring evidence of that to any county assessor's office and you'll be able to get what you need to avoid hassles. Going forward, there is a 1/4 of 1% of value fee that you would pay annually. Since you wouldn't be here all the time, there may be a way to adjust that, but you aren't talking about a lot of money. For a county that is really easy to deal with, Skagit county is the one.

So, If I bring my boat from its home port in Alaska with the intent of spending my hard earned money in Washington, on moorage, fuel, services, etc...

I get to pay a 7% of my boats value, PLUS another 1-2% of my boats value annually. For the privilege of spending my money there!

I'm just over joyed at that!

The good side of it is, if I fill out the proper forms I have 6 months to decide if I (and my $$) want to stick around.

Funny, thats in the USA! I can take my boat to Mexico for $10 and keep it there for 10 years. Mexico values the dollars boaters spend in their country!

Alaska also values the dollars spent by non residents. Guys bring your boats up here. We won't charge you a dime! While you are here you'll probably keep people working with all the money you spend in our restaurants, fuel docks, boat yards, and the like. Yes, Alaska values your business and won't charge you for the privilege of spending your money in our state!
 
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So, If I bring my boat from its home port in Alaska with the intent of spending my hard earned money in Washington, on moorage, fuel, services, etc...

I get to pay a 7% of my boats value, PLUS another 1-2% of my boats value annually. For the privilege of spending my money there!

I'm just over joyed at that!

The good side of it is, if I fill out the proper forms I have 6 months to decide if I (and my $$) want to stick around.

Funny, thats in the USA! I can take my boat to Mexico for $10 and keep it there for 10 years. Mexico values the dollars boaters spend in their country!

Alaska also values the dollars spent by non residents. Guys bring your boats up here. We won't charge you a dime! While you are here you'll probably keep people working with all the money you spend in our restaurants, fuel docks, boat yards, and the like. Yes, Alaska values your business and won't charge you for the privilege of spending your money in our state!
I didn't write the tax laws, I was just asked a question on what they are. If you paid Alaska sales tax, you would pay no sales tax in Washington. And if you leave it here, the tag costs 1/4 of 1% of the value. That is the answer to the OP's question, not an opinion on the tax.
 
I didn't write the tax laws, I was just asked a question on what they are. If you paid Alaska sales tax, you would pay no sales tax in Washington. And if you leave it here, the tag costs 1/4 of 1% of the value. That is the answer to the OP's question, not an opinion on the tax.


I wasn't picking on you personally.

I just find it difficult to fathom how Washington would work so hard to discourage people from spending money in their state. It must be the booming maritime industry. All the workers must have good jobs, so Washington doesn't need out of state boaters.

For example if a guy like me moved my boat to Washington I could come down there and would support the economy. The shipyards would get my business. All the other things that go along with boating would be purchased there. I would happily pay sales tax on my purchases supporting the state and local governments.

I know why Washington charges the tax to non residents. Its to keep cheating by actual residents down. I understand that, but in the end I think they might loose more than they are gaining.

BTW we do not have a state sales tax in Alaska so I would owe 7% of my boats value.
 
I get to pay a 7% of my boats value, PLUS another 1-2% of my boats value annually. For the privilege of spending my money there!!

The annual registration fee is not 1 or 2 percent of the boat's value. Delfin listed the correct values. So if I do the math right (and there's a good chance I won't) a boat valued at $100,000 pays an annual registration fee of $250.

The other thing most if not all marinas in this area require is proof of insurance. Some marina's including ours say they have to be named on the policy, but we've found in the case of Squalicum Marina, they are happy with a copy of the policy. Our insurance broker (Anchor Marine) automatically supplies a copy to our marina. The insurance needs to meet the minimum requirements set by the marina.

While most boaters probably have some sort of insurance, if one is not used to having this expense, it will make the annual registration fee look pretty puny.:)
 
An additional aspect in Washington that some may find useful is that the 60 day permit periods aren't totally rigid. In the case where you area in a yard having repairs carried out you can 'stop the clock' for the 60 day countdown whilst the repairs are being done. The County office has the required forms that need to be completed.

In theory at least you could be in the water for the six months obtained from the permit and its extensions, and then on the hard in a yard for the remainder of the year. Provided work was being done. And being on the hard is often at a lower monthly rate than being in a slip.
 
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Nick,

As a former resident of Oregon, who moved to Washington - I will add: What you are looking to do is very common. When you get to Oregon just ask around the marina and I am sure you will find more than one who makes the annual trip - and for the exact reasons you have outlined.

Yes, you can do 6mo a year - each year - w/proper permits. The 24mo exclusion is for the part of the law that was designed for folks who purchase boats in Washington and then want to stay there before leaving. As mentioned, they get a year - but you would not qualify for that anyway.

Another idea folks do is (depending on the boat size) truck it up and down I5, splashing in Olympia. And finally, some folks mix things up and figure out how to spend 6 mo (less a day) in Washington, then winter over in Canada. Usually this is combined with a trip to Alaska as all the 'common' time limits center around "6 mo" and actually add up one day short of a calendar year.

Best of luck, enjoy Oregon and the PNW, and know you will be in good company doing the yearly migration up -n- down. Also, fwiw: Consider a trip up the Columbia and the Snake some time. We did it in about 8 weeks, and felt a bit rushed... There is a surprising amount to do on the river.

-al-


Kevin, thank you, you're absolutely correct in what I am seeking.

Not to turn this into a tax or political thread (heaven forbid), I don't mind paying taxes - we're moving to Oregon, a 10% income tax state, from Delaware which has no income or sales tax. But, I'm funny about taxes. I want to be in the jurisdiction that taxes me, and to have a say in who is levying those taxes on me, and what they're going to use my money for. As an Oregon resident, I can't vote for Washington legislators, and have no say in how they would spend my tax money.

Delaware has no sales tax, so there's nothing to 'credit' to another state. The full freight Washington sales tax on the boat would be prohibitive to us as a just-retired couple. I don't ever want to 'evade' any taxes, just explore ways to legally avoid them so we can spend the money on fuel instead of another jurisdictions taxes.

If my reading of the regulations is accurate, and it's possible to legally spend 6 mos a year in Washington waters with the renewable cruising permits, that would be ideal for us. Going back and forth between Portland and Puget Sound a couple of times a year would be part of the fun. I was curious if anyone else here has done something similar, legally spending 6 mos a year on Puget Sound while living elsewhere.

Thanks again everyone.
 
... And if you leave it here, the tag costs 1/4 of 1% of the value. ...

That's a pittance. In California, the annual property tax for boats is from 1.0 to 1.5%, depending on location, same as real estate.
 
Thank you very much -al- (thomasonw), I appreciate it! I will indeed ask around the docks and hopefully find other kindred souls who might like to 'convoy' up and down the coast together (and I also hope to explore the Columbia and Snake Rivers as far as they are navigable).
 
Hey, you bet. And welcome again to the PNW. I know a few of the larger groups do tend to have some organized trips each year, at least up. PYC, RCYC, and perhaps FVPS to name a few.

For us we took basically 5 days: 2 downriver to Astoria (actualy, we stayed in Ilwaco - often one of the lowest cost fuel stops around - and closer to the bar as well). A short day to Grays Harbor (Watch the bar timing on both ends, not just the Columbia). Then one LONG day up to Neah Bay just on the Strait. During this leg it is good idea to plot a stop at La Push and make a decision underway to pull in, or continue on if things are going well. Biggest issue (aside from getting the bar timings correct) are crab pots. There is an 'Gentleman's Agreement' for tow-boat lanes that are to be pot free, but our (limited) experience is there are just less pots in the lanes, and no ability for the fisherman to gripe over lost pots... They get REAL bad towards the Cape Flattery - be warned. Last day was from Neah Bay to Port Angeles (We are a slow boat..)

Some folks like to make it on one hop going well off-shore - largely to avoid pots. Is a long trip that way, but doable with a couple or more of trusted hands.



And for a bit of what we did on our trip up the Columbia/Snake - here is some reading: mv.VikingStar: Columbia/Snake River


-al-
 
That's a pittance. In California, the annual property tax for boats is from 1.0 to 1.5%, depending on location, same as real estate.

Plus the 1/4 of 1% tax is assessed against a depreciated boat valuation which is substantially less than real market value. So as you say it's a "pittance." :iagree:
 
Alaska also values the dollars spent by non residents. Guys bring your boats up here. We won't charge you a dime! While you are here you'll probably keep people working with all the money you spend in our restaurants, fuel docks, boat yards, and the like. Yes, Alaska values your business and won't charge you for the privilege of spending your money in our state!

Yes Alaska does and if you vessel is not documented, meaning no require to register with the State, then you boat registration for 3 years is $24.....:thumb:
 
To the OP, I think your read is correct. At least it's the same as my read and I'm planning to do just what you are, i.e.spend up to 180 days in WA, but not more.

For what it's worth, Washigton has been getting picked on in a few threads for their "unfriendly" practices. I'm not trying to defend their tax policies, but think they are no different than any other state. There may well be exceptions, but every state I've looked into has rules about how long you can be in state before they declare you as a resident and subject you to their tax laws. That time limit is anywhere from 30 days to whatever. I actually think Washington has one of the longer non-resident periods compared to other states.

Of course each state's tax laws are different, so when you hang around too long, the financial consequences vary significantly. Some states have no sales or use tax, so you owe nothing. Some states have tax caps that limit total exposure. I think all states credit for taxes paid to other states.

Looking more broadly, the exact same thing happens when you travel to a foreign country in your boat. You are welcome as a visitor for some period of time, but eventually you and your boat become subject to local tax laws.

Oh, one other "rule" seems to be pretty widely applicable. If you are a resident of a particular state our country, then the tax laws apply immediately when you bring the boat into the state. It's sudden-death (by taxes) if you are a resident.
 
Oh, another important things about Washington State. The 60 day non-resident visitation, and two subsequent 60 day extensions are ONLY allowed for boats owned by a "natural person". That means the documented owner needs to be you, not an LLC or a Corp or other legal entity. It's just speculation on my part, but I believe this is intended to plug a loop hole and prevent Washington residents from setting up non-washington LLCs as owners of thier boats, then claiming the non-resident exemption from use tax.
 
Great information by all. We are looking to do something similar with our east coast USCG documented boat.

Does anyone know if you have to pay a Use Tax or other tax to have dockage in Vancouver, BC for the winter?
 
Great information by all. We are looking to do something similar with our east coast USCG documented boat.

Does anyone know if you have to pay a Use Tax or other tax to have dockage in Vancouver, BC for the winter?

If you're a resident of BC then you pay 12% when you purchase or bring a boat in, unless from a registered dealer in which case only 7%. I do not know about other taxes there.

The point is that every state and every country has taxes and the collect what it takes them to operate. In the US, each state does it differently. You see huge malls built in the states with no sales tax, bringing in people from neighboring states. One state collects high registration fees while another collects sales tax. Register a car in Mississippi and you'll be shocked as that's their means of collecting tax revenues. They figure that way they'll get everyone, not just homeowners. Live in one state and work in another for life complications. We had a facility in Chattanooga and we withheld state income taxes for three different states, none of which were Tennessee. We weren't required by law to do so, but employees preferred that we do since they were going to be subject to tax in their home state of NC, GA, or AL.

In the past three years, we have boated in 21 states and had to familiarize ourselves with the laws of each. 11 countries were easier. Some states charge fuel tax on all fuel and some simply on road fuel. All this is without even getting into Internet sales which are leading to rewrites of sales tax laws and eventually will change them dramatically.

Now, that said, if there were easily avoided taxes that would not require me to inconvenience myself significantly nor require me to stretch the rules or laws, then I'd avoid them. I live in a state with no personal income tax. I operate my businesses as S Corporations to have no state income tax. Thank goodness they limit the sales tax on boats to $18,000, but if they didn't, I'd still have no choice but to pay.
 
"If you're a resident of BC then you pay 12% when you purchase or bring a boat in, unless from a registered dealer in which case only 7%. I do not know about other taxes there."
NOT.
If you bring a boat into Canada, you will pay the Federal GST of 5% on importation. Then you will want to register or license the boat in a province, and will pay the Provincial Sales tax. Using a broker will save you some of the tax only if you have made a purchase through the broker and used a previously tax paid boat as a trade in. That will get you a credit against the tax owing of the amount of tax on the value of the trade. There are strict time constraints involved in a trade-in.

In BC the tax is 12%, made up of 5% GST and 7% PST, but those rates are subject to political whim, so could change at any time.

If you bring a non-BC boat into BC and do nothing, you are subject to time limits on your stay. Here is what one site tells us:

"In August 2012, the Canadian government began enforcing a law requiring foreigners to pay an import tax if they leave their boats in Canada after October 31. Americans may not leave their U.S. registered boat in Canada year-round without paying duty and tax (up to 13%). A E-99 permit may allow American boats to remain in a Canadian marina during the winter to get work done. For more information, call the marina division at 519-257-6457
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519-257-6457
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519-257-6457
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519-257-6457. "

I don't know of any other taxes that you would have to pay in BC.

I have tried to edit out the garbage at the end of that quote, and below, but it refuses to leave.


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If you bring a non-BC boat into BC and do nothing, you are subject to time limits on your stay. Here is what one site tells us:

"In August 2012, the Canadian government began enforcing a law requiring foreigners to pay an import tax if they leave their boats in Canada after October 31. Americans may not leave their U.S. registered boat in Canada year-round without paying duty and tax (up to 13%).
Good information. I saw that other provinces were 13% versus the 12% BC.

It makes sense, that if someone is keeping a boat in Canada over the winter, that's not just bringing it there for use. Again, there are no free rides in Canada or elsewhere. These are all good regulations for people to know and then base their decisions on.

We certainly knew Florida had no state income tax when we moved there, but it didn't really lead us there, because we knew we'd buy a home and they have high property taxes. The property tax rate in Fort Lauderdale is 2.3%. Where we lived in NC it was only 0.8%. Fortunately there is no property tax on boats in FL. The state wants boats.
 
It's banditry when governments want to tax assets moving into their territories (not talking of property taxes). At least in the USA, we give credit for sales/use taxes already paid. So, do Canadian taxes also apply to automobiles, as well as other personal and financial assets brought to the country?
 
It's banditry when governments want to tax assets moving into their territories (not talking of property taxes). At least in the USA, we give credit for sales/use taxes already paid. So, do Canadian taxes also apply to automobiles, as well as other personal and financial assets brought to the country?


It cost me 9.5% duty plus 12% combined GST and PST on top of that to bring my KK42 to country. That's 23% total in duty and taxes. The 9.5% duty is on boats not made in North America. We wouldn't pay the 9.5% duty on an Nordic Tug, for example.

Yes. It hurts, but with the decline in the Cdn $ against the US$, The boat is now worth more than in Cdn $ than 2.5 years ago.


Jim
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