Affordable and Supportive Housing Sales and Use Tax: Collection and Use of Revenue (March 2025)
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- 2025 Hd Affordable Supportive Housing Sales Use Tax Final 38A1Ad61 E482 4C2
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- 2025 Hd Affordable Supportive Housing Sales Use Tax Final 38A1Ad61 E482 4C2
Summary
An annual report to the Washington State Legislature dated March 2025 by the Department of Commerce Housing Division on the collection and use of revenues from the affordable and supportive housing sales and use tax, required by RCW 82.14.540(11). The report explains that the 2019 Encouraging Investments in Affordable and Supportive Housing Act created a sales tax credit sharing part of the 6.5% state sales tax with participating cities and counties at a rate of either 0.0146% or 0.0073%. It reports that for state fiscal year 2024, covering July 1, 2023 to June 30, 2024, 127 jurisdictions received distributions from the Department of Revenue totalling $53,665,468.57 and 118 jurisdictions completed the required report. It states that 55 jurisdictions or interlocal agreements reported spending $26,728,644.96 on capital projects, rent assistance, operations and other expenses.
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“Affordable and Supportive Housing Sales and Use Tax: Collection and Use of Revenue (March 2025).”
Original at app.leg.wa.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2025-hd-affordable-supportive-housing-sales-use-tax-final-38a1ad61-e482-4c2/
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Affordable and Supportive
Housing Sales and Use Tax -
Collection and use of revenue
Annual report on the collection and use of revenues pursuant to
RCW 82.14.540(11)
March 2025
Report to the Legislature
HOUSING DIVISION Director Joe Nguyễn
v3.5.1
Acknowledgments
Washington State Department of Commerce
Tedd Kelleher, Interim Assistant Director, Housing
Division
Camille Gix, Policy Coordinator, Housing Division
Local governments
Thank you to all the jurisdictions that contributed
data for this report.
1011 Plum St. SE
P.O. Box 42525
Olympia, WA 98504-2525
www.commerce.wa.gov
For people with disabilities, this report is available on
request in other formats. To submit a request, please
call 7-1-1 and ask to be connected to 360-725-4000.
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 2
Table of contents
Executive summary .........................................................................................................................................4
Introduction ....................................................................................................................................................5
State fiscal year 2024 data overview ...............................................................................................................7
Jurisdictions' use of funds for state fiscal year 2024 ....................................................................................12
Appendix A: Chapter 365-240 WAC Affordable and Supportive Housing - Sales and Use Tax .......................16
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 3
Executive summary
Overview
The 2019 Encouraging Investments in Affordable and Supportive Housing Act (RCW 82.14.540) authorized a
new sales tax credit for housing investments. The tax credit does not increase the tax rate for consumers;
instead, it shares a portion of the 6.5% state sales tax with participating cities, counties and towns. The
maximum rate imposed may not exceed either 0.0146% or 0.0073%. These sales tax distributions will expire
20 years after the jurisdiction first imposed the tax (in 2039 or 2040).
Jurisdictions implementing the tax must report annually to the Department of Commerce (Commerce) by
October 1 on the "collection and use of the revenues," as prescribed by WAC 365-240-030.
State fiscal year 2024 data
Commerce collected spending data from jurisdictions for the period from July 1, 2023, to June 30, 2024.
Commerce used a proactive data collection process, including emailing a survey to jurisdictions and calling
local officials. This led to 118 jurisdictions completing the required annual report on revenue spending for
state fiscal year 2024.
Twenty-eight of the 127 jurisdictions participate in interlocal agreements (ILA) to pool and distribute their
revenue.
Distributions
The total DOR distribution statewide was $53,665,468.57
127 jurisdictions received distributions from the Department of Revenue (DOR):
• 90 cities
• 37 counties
Spending
Fifty-five jurisdictions or ILAs reported spending a total of $26,728,644.96 on new or existing projects:
20 jurisdictions or ILAs reported spending or committed $1,499,676.01 toward capital projects
15 jurisdictions or ILAs reported spending $1,499,676.01 on rent assistance programs
13 jurisdictions or ILAs reported spending $8,421,812.07 on operations and maintenance costs
7 jurisdictions or ILAs reported spending $5,578,091.21 on other expenses
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 4
Introduction
Tax rate
The tax rate is based on three factors at the time of adoption:
1. The date of adoption
2. The presence of a qualifying local tax (cities only)
3. Whether the corresponding city or county was a participating jurisdiction
The tax rate that jurisdictions can receive is different for counties and cities. The tax rate also depends on
whether a jurisdiction had a "qualifying local tax" in place before July 27, 2020.
Cities
Participating cities with a qualifying local tax in place on July 27, 2020
The tax rate is 0.0146% of taxable retail sales for a participating city with a qualifying local tax imposed before
July 27, 2020, with the revenues dedicated to affordable housing. The four eligible qualifying local taxes are:
1. Affordable housing levy under RCW 84.52.105
2. Housing and related services sales tax under RCW 82.14.530
3. Levy lid lift that is restricted to affordable housing under RCW 84.55.050
4. Mental health and chemical dependency sales under RCW 82.14.460 (only applicable to Tacoma)
Participating cities without a qualifying local tax
The tax rate is 0.0073% of taxable retail sales within a participating city without a qualifying local tax if the
county the city is located in also chose to participate. If the county does not participate, the city received the
maximum 0.0146% until July 27, 2020, but nothing after that.1
Counties
Counties must elect to participate in the tax credit to receive distributions. The tax rate for participating
counties is 0.0146% of taxable retail sales in incorporated areas, with or without a qualifying local tax. In
incorporated areas, participating counties receive the 0.0146% rate unless the city has a qualifying local tax.
For cities that have a qualifying local tax and receive the 0.0146% rate, the county will not receive any
distributions from sales in that city. For participating cities without a qualifying local tax receiving a 0.0073%
share, the county will receive a 0.0073% share, too.
Maximum distribution cap
The maximum authorized tax distribution is based on the jurisdiction's taxable retail sales in state fiscal year
2019 multiplied by the authorized tax rate (0.0073% or 0.0146%). For example, if a city's taxable retail sales
were $1 million in fiscal year 2019, the maximum amount the city may receive is either $73 or $146 per fiscal
year, depending on its authorized rate. If that city had taxable retail sales of $50,000 for a particular month and
was eligible to receive the 0.0073% rate, it would receive $3.65 in tax distribution for that month.
1 This was a bill drafting error, according to the Association of Washington Cities. Legislation was passed to fix the issue, but the bill
was vetoed to maintain revenue for the state during the COVID-19 pandemic: Municipal Research and Services Center, "Revenue Guide
for Washington Counties," (November, 2024).
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 5
Allowable use of funds
Jurisdictions may use the revenue for the following activities under RCW 82.14.540(6a)2 for people with
incomes at or below 60% of the median income of the county or city imposing the tax:
(i) Acquiring, rehabilitating, or constructing affordable housing, which may include new units within an existing
structure or facilities providing supportive housing services under RCW 71.24.385 (behavioral health organizations);
(ii) Funding the operations and maintenance costs of new units of affordable or supportive housing; or
(iii) For providing rental assistance to tenants.
Administrative costs may not exceed 10 percent of the annual tax distributed. Jurisdictions may also issue
bonds against the tax revenue to finance loans or grants to nonprofit organizations or public housing
authorities.
Cities and counties may enter into interlocal agreements (ILAs) with other cities, counties and/or housing
authorities to pool and allocate the revenue.
Agency roles and activities
Department of Revenue
The Department of Revenue (DOR) interprets and implements RCW 82.14.540, distributes revenue monthly to
jurisdictions and calculates the maximum tax distribution participating jurisdictions may receive yearly. DOR
collects minimal information from jurisdictions to administer the tax.
Department of Commerce
Participating jurisdictions must report to Commerce annually on the "collection and use of the revenues."
Pursuant to RCW 82.14.540, Commerce conducted rulemaking in 2019 and 2020 to prescribe the content of
those reports. Commerce collects information from jurisdictions on the collection and use of revenues and
prepares this report annually.
2 Chapter 101, Laws of 2023 (SB 5604) amended the statute to allow all jurisdictions to use these funds for rental assistance and
administrative costs. Previously counties over 400,000 population and cities over 100,000 population could not use the funds for rent
assistance, and covering administrative costs was not an allowable use.
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 6
State fiscal year 2024 data overview
Participating jurisdictions
Table 1 shows all reported data for state fiscal year 2024 (July 1, 2023, through June 30, 2024).
127 jurisdictions (37 counties and 90 cities) received distributions from the DOR
DOR distributions statewide totaled $53,665,468.57
Table 1: Participating jurisdictions and state fiscal year 2024 distributions
Jurisdiction Total distributions
ADAMS COUNTY $51,473.23
AIRWAY HEIGHTS $19,353.36
ANACORTES $81,267.09
ARLINGTON $44,919.94
ASOTIN COUNTY $30,949.24
AUBURN $149,338.07
BAINBRIDGE ISLAND $43,463.82
BELLEVUE $625,858.12
BENTON COUNTY $618,727.25
BONNEY LAKE $49,389.32
BOTHELL $106,990.94
BREMERTON $77,236.45
BURIEN $63,337.24
BURLINGTON $74,039.40
CARNATION $3,645.58
CASHMERE $5,052.43
CHELAN CITY $15,706.68
CHELAN COUNTY $199,558.97
CLALLAM COUNTY $136,012.20
CLARK COUNTY $773,383.81
CLYDE HILL $7,295.89
COLUMBIA COUNTY $10,364.43
COVINGTON $42,544.04
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 7
Jurisdiction Total distributions
COWLITZ COUNTY $161,897.88
DAYTON $2,548.08
DES MOINES $32,666.74
DOUGLAS COUNTY $127,381.86
DUVALL $9,025.31
EAST WENATCHEE $33,224.72
EDMONDS $71,931.05
ELLENSBURG $85,189.37
ENUMCLAW $27,674.90
EVERETT RTA $224,718.31
FEDERAL WAY $125,065.50
FIFE $71,422.87
FORKS $4,713.90
FRANKLIN COUNTY $33,108.54
GARFIELD COUNTY $5,136.79
GRANT COUNTY $251,237.61
GRAYS HARBOR COUNTY $105,206.02
ISLAND COUNTY $146,440.13
ISSAQUAH $122,956.20
JEFFERSON COUNTY $61,855.33
KALAMA $4,453.14
KENMORE $22,466.15
KENT RTA $194,889.31
KING COUNTY $4,527,457.99
KIRKLAND $211,668.86
KITSAP COUNTY $548,947.89
KITTITAS COUNTY $79,043.90
KLICKITAT COUNTY $54,212.91
LACEY $110,373.93
LAKE FOREST PARK $9,970.02
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 8
Jurisdiction Total distributions
LAKE STEVENS $34,891.73
LAKEWOOD $97,697.17
LEAVENWORTH $15,631.81
LEWIS COUNTY $233,150.81
LIBERTY LAKE $28,504.48
LINCOLN COUNTY $15,053.76
LONGVIEW $74,283.98
LYNNWOOD $196,819.21
MAPLE VALLEY $31,276.12
MARYSVILLE $94,117.37
MASON COUNTY $121,900.28
MEDINA $9,782.77
MERCER ISLAND $37,372.56
MILL CREEK $24,674.77
MONROE $45,540.66
MOSES LAKE $57,023.92
MOUNT VERNON $65,029.18
MUKILTEO $22,746.85
NEWCASTLE $12,152.37
NORMANDY PARK $5,447.45
NORTH BEND $23,323.54
OKANOGAN COUNTY $76,963.29
OLYMPIA $329,491.11
OMAK $16,931.69
PACIFIC COUNTY $40,900.11
PASCO $105,831.92
PEND OREILLE COUNTY $24,130.78
PIERCE COUNTY $1,601,254.00
PORT ANGELES $58,025.41
PORT ORCHARD $44,553.73
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 9
Jurisdiction Total distributions
PORT TOWNSEND $20,596.03
POULSBO $35,922.03
PUYALLUP $194,101.51
QUINCY $80,117.99
REDMOND $289,265.78
RENTON $226,431.09
RIDGEFIELD $23,741.44
SAMMAMISH RTA $53,098.32
SAN JUAN COUNTY $82,053.83
SEATAC $147,445.46
SEATTLE $4,228,362.75
SEDRO WOOLLEY $14,140.23
SEQUIM $29,920.82
SHORELINE $86,235.08
SKAGIT COUNTY $277,060.89
SKAMANIA COUNTY $11,908.78
SNOHOMISH CITY $37,391.39
SNOHOMISH COUNTY $1,343,274.79
SNOQUALMIE $23,974.37
SPOKANE CITY $402,274.47
SPOKANE COUNTY $937,880.63
SPOKANE VALLEY $193,522.69
STANWOOD $14,544.47
STEVENSON $4,807.77
SUMNER $51,630.01
TACOMA $853,070.46
THURSTON COUNTY $502,551.38
TUKWILA $165,998.21
TUMWATER $63,703.51
UNIVERSITY PLACE $25,412.69
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 10
Jurisdiction Total distributions
VANCOUVER $658,931.05
WAHKIAKUM COUNTY $6,946.98
WALLA WALLA COUNTY $96,061.54
WASHOUGAL $14,467.98
WENATCHEE $85,427.15
WHATCOM COUNTY $683,598.73
WHITMAN COUNTY $64,337.46
WINTHROP $3,550.64
WOODINVILLE $63,206.56
WOODWAY $1,747.86
YAKIMA CITY $147,516.63
YAKIMA COUNTY $351,655.51
YARROW POINT $1,887.01
YELM $17,401.39
Total $53,665,468.57
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 11
Jurisdictions' use of funds for state fiscal year 2024
Forty-nine jurisdictions reported spending a total of $26,728,644.96 on new or existing projects:
15 jurisdictions reported spending $1,499,676.01 for rent assistance programs (shown in Table 2)
20 jurisdictions reported spending $11,229,065.67 for capital projects (shown in Table 3), including:
• 163 units reported under contract (shown in Table 6)
• 865 units under construction (shown in Table 6)
• 165 units in service (shown in Table 6)
13 jurisdictions reported spending $8,421,812.07 to support operations and maintenance costs of new
units of affordable housing (shown in Table 4)
7 jurisdictions reported spending $5,578,091.21 for other expenses (shown in Table 5)
Table 2: Rent assistance expenditures by jurisdiction
Jurisdiction Total spent Total households served Priority population(s) served
Arlington $43,926.82 21 Pandemic recovery; under 30% AMI
Clark County $14,245.00 20 Under 30% AMI
Covington $32,129.08 158 Under 60% AMI
Enumclaw $127,398.99 122 Households paying more than 50% of income in rent
King County $297,535.45 117 Households exiting homelessness
SeaTac $189,000.00 60 BIPOC
Kirkland $357,301.00 127 N/A
Lakewood $68,905.00 6 N/A
Mercer Island $62,195.00 22 Below 80% AMI
Mount Vernon $10,000.00 9 N/A
San Juan County $2,202.90 3 Seniors, people with disabilities, under 30% AMI
Shoreline $79,792.28 36 Under 60% AMI
Stanwood $8,214.00 8 Under 60% AMI
Tukwila $49,076.00 41 Under 60% AMI
Whatcom County $157,754.49 11 Families with children, young adults
Total $1,499,676.01 761
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 12
Table 3: Capital project expenditures by jurisdiction
Jurisdiction Total spent Activity
AFC low-income housing complex
Anacortes $763,028.00
AHA Townhomes
ARCH ILA $1,400,000.00 Ardea at Totem Lake
Burlington $10,418.40 A new restroom was installed at the First Step Center to serve shelter residents
Chelan and
$120,138.56 Heritage Heights at Lake Chelan (senior living rehabilitation)
Douglas Counties
Azalea Place, Weaver Creek Commons, Crown Villa Apartments, Arbor Ridge Assisted Living,
Clark County $696,034.39
Arbor Ridge Senior Apartments, Mill Creek Senior Estates and St. Helens Manor
Cowlitz County $399,010.49 Sunrise Village
Catherine Property - pre-development (units TBD)
Ellensburg $55,511.00
Stuart Meadows - new construction (18 units)
Everett $249,765.63 Clare's Place Emergency Pallet Needs
Grant County $554,070.93 Frenchman Hills Roofing Project
King County $289,149.12 Low Income Housing Institute - Skyway - Childhaven
Lakewood $37,555.03 N/A
Acquisition of real property and property rights related to the construction of affordable housing
North Bend $3,342.32 at 203 Main Street in North Bend, WA. Tax funds were used to conduct a phase one
environmental assessment before the city acquired the property.
Okanogan
$140,000.00 Wildrose Apartments
County
Tahoma Place, KWA 15th and Tacoma (87 units for 50% and below AMI, all senior housing)
Pierce County $2,919,631.68
S 13th and I Street/Shiloh New Life Housing (60 units for 50% and below AMI)
San Juan County $19,935.22 OPAL Community Land Trust's Pea Patch rental housing
Skagit County $5,843.75 VOA North in Burlington (new construction project/environmental engineering costs)
Thurston County $1,741,380.00 Martin Way Phase II, now known as Lotus Court, located at 111 Pattison St, Olympia, WA 98506
Safe Stay Community 3 - 415 West
Vancouver $1,718,645.00
Safe Stay Community 4 - Kiggins Village
Whatcom County $90,000.00 Karen Durham House
Yakima $15,606.15 N/A
$11,229,065.6
Total
7
Note: Participating jurisdictions reported the above activities and are minimally edited for clarity.
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 13
Table 4: Operations and maintenance expenditures by jurisdiction
Jurisdiction Total spent Units supported
Burlington $152,221.78 45
Cashmere $15,185.10 18
King County $403,175.34 209
Leavenworth $1,994.72 24
Lincoln County $25,920.00 2
Mount Vernon $28,354.07 70
Seattle $1,858,562.94 204
Sedro Wooley $12,830.34 1
Skagit County $190,470.20 70
Spokane $542,038.77 2
Vancouver $4,397,158.00 80
Wenatchee $57,340.00 20
Whatcom $273,920.63 41
Total $8,421,812.07 904
Table 5: Other expenses reported
Jurisdiction Activity
Auburn Contribution to South Sound Housing Affordability
Chelan and Douglas counties Spent toward four-county strategic planning and mapping efforts
Covington Membership dues to South King County Housing and Homelessness Partners
Enumclaw Utility and bill assistance for families
Copy paper charges for information packets for the Homelessness and Affordable Housing
Kittitas County
Committee
Lincoln County Funds to Rural Resources for first-time home buyers' program
Spokane County Administrative and indirect costs
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 14
Table 6: Project and unit status by jurisdiction with capital projects
Jurisdiction Units under contract Units under construction Units in service
Anacortes 0 0 25
ARCH ILA 0 430 0
Chelan and Douglas counties 146 0 0
Clark County 0 80 134
Ellensburg 16 12 6
Grant County 0 1 0
King County 0 54 0
Lakewood 0 1 0
Okanogan County 1 project 1 project 0
Pierce County 1 224 0
Thurston County 0 63 0
Total 163 + 1 project 865 + 1 project 165
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 15
Appendix A: Chapter 365-240 WAC Affordable and
Supportive Housing - Sales and Use Tax
WAC 365-240-010
Authority.
This chapter is promulgated pursuant to the authority granted in RCW 82.14.540 requiring counties and cities
that impose the local sales and use tax for affordable and supportive housing to report annually to the
department of commerce on the collection and use of the revenue and for the department of commerce to
adopt rules prescribing the content of those reports.
[Statutory Authority: RCW 82.14.540(11). WSR 20-09-064, § 365-240-010, filed 4/13/20, effective 5/14/20.]
WAC 365-240-020
Authorized uses of tax revenue.
Counties and cities may use tax revenue for:
(1) Acquiring, rehabilitating, or constructing affordable housing, which may include new units within an existing
structure or facilities providing supportive housing services under RCW 71.24.385 (behavioral health
organizations);
(2) Operations and maintenance costs of new units of affordable or supportive housing;
(3) Providing rental assistance to tenants that are at or below 60 percent of the area median income of the
county or city that is imposing the tax; or
(4) Administrative costs of the county or city associated with administering this section, which may not exceed
10 percent of the annual tax distributed to the jurisdiction under this section.
[Statutory Authority: RCW 82.14.540. WSR 24-04-016, § 365-240-020, filed 1/26/24, effective 2/26/24.
Statutory Authority: RCW 82.14.540(11). WSR 20-09-064, § 365-240-020, filed 4/13/20, effective 5/14/20.]
WAC 365-240-030
Annual report to the department of commerce.
Jurisdictions must submit a report to the department by October 1st annually with the following information
pertaining to the most recent fiscal year. Reports submitted by a lead jurisdiction or managing entity pursuant
to an interlocal agreement must be accompanied by contract language designating the responsible entity for
submitting annual reports and ensuring their accuracy.
The first report will be due October 1, 2020, and annually thereafter.
(1) General:
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 16
(a) All references made in this section to funds, funds pooled, or funds utilized or bonded against are in regard
to those derived from a jurisdiction's affordable and supportive housing sales and use tax distribution from the
department of revenue for the corresponding fiscal year.
(b) An annual report submitted by a lead jurisdiction or managing entity pursuant to an interlocal agreement
must be accompanied by agreed language designating it as the responsible party for report timeliness and
accuracy.
(c) Information submitted by a lead jurisdiction or managing entity pursuant to an interlocal agreement must
include the total combined revenue collection and program activities for all jurisdictions subject to the
agreement. A separate report on revenue collection and program activities must be submitted for each
jurisdiction choosing to additionally expend funds outside the agreement, if applicable.
(d) All reports submitted pursuant to this section must include contact information for the preparer.
(2) Revenue collection:
(a) Total affordable and supportive housing sales and use tax distribution for the reporting jurisdiction(s);
(b) Applicable affordable housing and supportive housing sales and use tax rate(s) for the reporting
jurisdiction(s);
(c) If an interlocal agreement is in place, the total revenue utilized jointly pursuant to the agreement;
(d) If an interlocal agreement is in place, the total revenue utilized by jurisdiction(s) separately, not according
to the terms of the agreement.
(3) Program activities:
(a) Total funds committed;
(b) Number, types, and status of projects supported with funds;
(c) Degree of leverage with other public and private funds;
(d) Total funds utilized for rent assistance; and
(e) Duration of affordability for projects supported with funds.
(4) Program outputs:
(a) Total funds committed for loans and grants;
(b) Total funds obligated to support bonding activities;
(c) Total funds committed for operations and maintenance of new units of affordable or supportive housing;
(d) Total funds spent on administrative costs associated with administering this section, not to exceed 10
percent of the annual tax distributed to the jurisdiction;
(e) Total number of households served with funds used for rent assistance; and
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 17
(f) Target populations served with funds.
[Statutory Authority: RCW 82.14.540. WSR 24-04-016, § 365-240-030, filed 1/26/24, effective 2/26/24.
Statutory Authority: RCW 82.14.540(11). WSR 20-09-064, § 365-240-030, filed 4/13/20, effective 5/14/20.]
2024 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 18
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