FILED DECEMBER 11, 2025 In the Office of the Clerk of Court WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
REC SOLAR GRADE SILICON LLC, ) ) No. 40685-7-III Appellant, ) ) v. ) ) STATE OF WASHINGTON, ) UNPUBLISHED OPINION DEPARTMENT OF REVENUE, ) ) Respondent. )
STAAB, A.C.J. — Washington requires consumers to pay a use tax on natural gas
purchased from a source outside the state. RCW 82.12.022. Like any tax, there are
several exemptions. Relevant to this appeal, RCW 82.12.9651(1) provides a tax
exemption for gases and chemicals used by a manufacturer in the production of
semiconductor materials. The statute limits the exemption to several specifically
described uses of the gas, including “to grow the product,” followed by a catchall phrase
“and other such uses whereby the gases and chemicals come into direct contact with the
product during the production process.” Id. The exemption also includes gases used to
clean equipment used in the production process. No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
REC Solar Grade Silicon LLC (REC) produces solar grade silicon. It uses natural
gas in the production process to grow its product, but the natural gas does not come into
direct contact with the silicon.
REC filed a claim seeking a refund of use tax paid, arguing that it was entitled to
the exemption because its use of natural gas to grow semiconductor materials was one of
the listed exemptions. The Board of Tax Appeals (Board) denied REC’s request for
exemption, concluding that the qualifying phrase following “whereby” applied to all
listed uses and allowed for an exemption only when there was direct contact between the
gas and the product. After REC appealed, the superior court certified the case for direct
review by this court.
We reverse the Board. The structure and plain language of the statute compel the
conclusion that the qualifier following “whereby” modifies only the immediate
proceeding phrase “other such uses.” This interpretation is supported by the rule of the
last antecedent, which provides that a qualifying phrase ordinarily applies to only the last
item in a list unless a contrary intent is indicated. Here, the exemption sentence is
structured into three parts: a specific list of uses, a catchall provision that requires direct
contact with the gas during the production process, and a cleaning clause providing an
exemption for gas used to clean the equipment after the process. The “whereby” clause,
is not integrated into the earlier series of uses and most naturally modifies only “other
2 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
such uses.” The Washington Department of Revenue’s (the Department) contrary
reading conflicts with both the statute’s plain language and its explicit legislative intent.
Since it is undisputed that REC uses natural gas in the production of
semiconductor materials to grow its product, one of the listed uses under the exemption,
REC is entitled to a refund of the tax paid to use natural gas for this purpose.
BACKGROUND
As the material facts are not in dispute, the following summary draws largely from
the Board’s “Initial Decision on Cross Motions for Summary Judgment.”
REC’s Manufacturing Process
REC operates a facility in Moses Lake, where it manufactures semiconductor
materials, including solar grade polysilicon. This high-purity polysilicon is then sold to
solar panel manufacturers.
REC uses a multi-step manufacturing process. Initially, metallurgical grade
silicon is ground to fine particles and reacted with hydrogen gas to form trichlorosilane
(TCS). The TCS is then distilled and purified into silane gas. Next, the silane gas, along
with hydrogen, is introduced into a fluidized bed reactor, where it decomposes and
deposits silicon onto silicon seed particles. These particles grow in size and eventually
form solar grade polysilicon.
3 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
Natural gas plays two roles in the process described above. First, natural gas is
used to create the hydrogen used in the reactor.1 Second, natural gas-fired heaters heat
transfer fluid or oil, and the heated oil, in turn, provides the energy used to purify and
react the materials being distilled, resulting in the production of silane. It is undisputed
that the natural gas does not directly contact the silicon during the manufacturing process.
Department of Revenue Refund Denial
Between 2016 and 2017, REC submitted two refund requests to the Washington
Department of Revenue (Department) for use tax paid on natural gas used during the
period January 1, 2012 through October 31, 2017. The total amount of use tax REC paid
during this period was approximately $1,722,538.
REC requested its refunds relying on the use tax exemption in RCW 82.12.9651(1),
which provides:
The provisions of this [use tax] chapter do not apply with respect to the use of gases and chemicals used by a manufacturer or processor for hire in the production of semiconductor materials. This exemption is limited to gases and chemicals used in the production process to grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product, and other such uses whereby the gases and chemicals come into direct contact with the product during the production process, or
1 The Department contends that REC did not argue this use of natural gas should qualify for the use-tax exemption before the Board and requests that we disregard this argument. However, as REC points out in its reply brief, REC did raise this argument before the Board.
4 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
uses of gases and chemicals to clean the chambers and other like equipment in which such processing takes place.
(Emphasis added.)
The Department conducted a limited audit and issued a partial refund of
$80,999.73. It otherwise denied REC’s requests on the basis that the use tax exemption
did not apply because the statute requires that the gas “must directly contact the product
being produced.” AR at 212-13.
Administrative Appeals
REC appealed the Department’s determination to the Department’s administrative
review and hearings division, which affirmed the denial. REC then appealed to the
Board.
Before the Board, the parties filed cross-motions for summary judgment,
advancing their interpretations of the exemption in RCW 82.12.9651(1). REC asserted
that it was entitled to the exemption because it is a manufacturer of semiconductor
materials, the natural gas was used to produce silane gas, and the silane gas is used to
grow solar grade polysilicon. The Department responded with two primary arguments in
asserting that REC was not entitled to the exemption: (1) the natural gas was used to
produce silane gas, a separate product at an interim stage that could itself be sold, and (2)
the natural gas never came into direct contact with the product being produced.
5 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
Following a hearing, the Board issued an initial decision granting summary
judgment in favor of the Department. In its decision, the Board first summarized the
parties’ arguments:
[REC] essentially argues that the “last antecedent rule” should be applied to the statute, so that the requirement for the gas to come into “direct contact” with the product is limited to “other such uses” and not all of the enumerated uses in RCW 82.12.9651. ....
The Department asserts that the statute’s phrase “other such uses” modifies the prior list of activities [based on the series-qualifier rule].
Clerk’s Papers (CP) at 15-16. Subsequently, the Board, relying on a Washington
Supreme Court case, PeaceHealth St. Joseph Medical Center. v. Department of Revenue,2
and a United States Supreme Court case, Paroline v. United States,3 adopted the
Department’s interpretation and applied the series-qualifier rule in concluding:
6. The phrase “and other such uses whereby the gases and chemicals come into direct contact with the product during the production process” in RCW 82.12.9651 applies to the list of activities (“grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product”) that are exempt uses of gases or chemicals. 7. The exemption in RCW 82.12.9651 does not apply to the Taxpayer’s use of natural gas because the gas does not come into direct contact with the product.
CP at 18.
2 196 Wn.2d 1, 8, 468 P.3d 1056 (2020). 3 572 U.S. 434, 134 S. Ct. 1710, 188 L. Ed. 2d 714 (2014).
6 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
REC petitioned for reconsideration, which the Board denied. REC then petitioned
for judicial review in the Grant County Superior Court. The superior court certified the
case for direct review by this court pursuant to RCW 34.05.518.
ANALYSIS
This appeal requires the court to interpret RCW 82.12.9651(1) and decide whether
REC’s use of natural gas in its manufacturing process qualifies for a use tax exemption.
REC argues that the statute’s “direct contact” requirement applies only to the final
catchall clause—“other such uses”—under the last antecedent rule. The Department
contends that the plain language of the statute, as interpreted through the series-qualifier
rule, applies the “direct contact” condition to all listed uses in the statute.
1. STANDARD OF REVIEW
A tax exemption presupposes a taxable status and the burden is on the taxpayer to
establish eligibility for the benefit. Group Health Co-op. v. Wash. State Tax Comm’n, 72
Wn.2d 422, 429, 433 P.2d 201 (1967). Ambiguous tax exemption statutes are to be
“construed strictly, though fairly and in keeping with the ordinary meaning of their
language, against the taxpayer.” Id.
The Administrative Procedures Act (APA), ch. 34.05 RCW, governs judicial
review of final Board decisions. See RCW 82.03.180. The party asserting invalidity has
the burden of demonstrating the invalidity of an agency action. RCW 34.05.570(1)(a).
7 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
This court grants relief if it determines that the agency has erroneously interpreted or
applied the law. RCW 34.05.570(3)(d). Our review is de novo. RCW 82.03.180.
Where, as here, the original administrative decision was on summary judgment,
the reviewing court must overlay the APA standard of review with the summary
judgment standard. Verizon Nw., Inc. v. Wash. Emp. Sec. Dep’t, 164 Wn.2d 909, 916,
194 P.3d 255 (2008). Under the summary judgment standard, we review the facts in the
record in the light most favorable to the nonmoving party. Id. Summary judgment is
appropriate only where the undisputed facts entitle the nonmoving party to judgment as a
matter of law. Id. Thus, we evaluate the facts in the administrative record de novo and
the law in light of the “error of law” standard in RCW 34.05.570(3)(d). Id.
2. PRINCIPLES OF STATUTORY INTERPRETATION AND RELEVANT RULES OF GRAMMAR
This case involves statutory interpretation, which also presents a question of law
reviewed de novo. Jametsky v. Olsen, 179 Wn.2d 756, 761, 317 P.3d 1003 (2014). The
primary goal of statutory interpretation is to determine and give effect to the legislature’s
intent. Gray v. Suttell & Assocs., 181 Wn.2d 329, 339, 334 P.3d 14 (2014). To
determine legislative intent, we look at the plain language of the statute, consider the text
of the provision, the context of the statute, any related statutory provisions, and the
statutory scheme as a whole. Id.
While we retain the ultimate authority to interpret the statute, we grant
“ʻ[c]onsiderable judicial deference’ to the interpretation of the provision by those
8 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
charged with its enforcement” (i.e., the Department). Impecoven v. Dep’t of Revenue,
120 Wn.2d 357, 363, 841 P.2d 752 (1992) (alteration in original) (quoting Keller v. City
of Bellingham, 92 Wn.2d 726, 731, 600 P.2d 1276 (1979)) (alteration in original).
Nevertheless, “[w]here statutory language is plain and unambiguous, courts will not
construe the statute but will glean the legislative intent from the words of the statute
itself, regardless of contrary interpretation by an administrative agency.” Agrilink Foods,
Inc. v. Dep’t of Revenue, 153 Wn.2d 392, 396, 103 P.3d 1226 (2005).
Turning to the language of the statute itself, we consider “traditional rules of
grammar” to discern the plain meaning. PeaceHealth, 196 Wn.2d at 8. In this case, the
parties disagree on the application of two linguistic canons: the last antecedent rule and
the series-qualifier rule. See City of Bremerton v. Bright, 32 Wn. App. 2d 465, 471, 556
P.3d 739 (2024).
The last antecedent rule provides that, unless a contrary intention appears in the
statute, qualifying words and phrases, both grammatically and legally, refer to the last
antecedent. Boeing Co. v. Dep’t of Licensing, 103 Wn.2d 581, 587-88, 693 P.2d 104
(1985). The rule reflects basic intuition on how we speak. Lockhart v. United States, 577
U.S. 347, 351, 136 S. Ct. 958, 194 L. Ed. 2d 48 (2016). Application of the rule is
particularly appropriate when the list is complex and extending the modifier across all
items would be cognitively burdensome. Id. “Related to this rule is the corollary
‘principle that the presence of a comma before the qualifying phrase is evidence the
9 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
qualifier is intended to apply to all antecedents instead of only the immediately preceding
one.’” State v. Bunker, 169 Wn.2d 571, 578, 238 P.3d 487 (2010) (internal quotation
marks omitted) (quoting City of Spokane v. County of Spokane, 158 Wn.2d 661, 673, 146
P.3d 893 (2006)).
The last antecedent rule is one of many aids to discover intent or meaning, but is
not inflexible or uniformly binding. Matter of Marriage of Cardwell, 16 Wn. App. 2d 90,
99, 479 P.3d 1188 (2021). The rule is generally applied unless there is evidence of a
contrary legislative intent. City of Spokane, 158 Wn.2d at 673. However, there is no
mandatory presumption that the rule must be applied unless its application produces a
nonsensical result. PeaceHealth, 196 Wn.2d at 10.
Conversely, the series-qualifier rule provides, “‘when there is a straightforward,
parallel construction that involves all nouns or verbs in a series, a prepositive or
postpositive modifier normally applies to the entire series.’” Id. at 8-9 (quoting BLACK’S
LAW DICTIONARY 1642 (11th ed. 2019)). In considering whether the last antecedent rule
or the series-qualifier rule applies, we consider the context of the challenged language
and the statutory scheme as a whole. Id. at 9.
Some examples help to demonstrate the application of these rules. In Lockhart,
the U.S. Supreme Court noted that under the series qualifier rule, a reader seeing “the
laws, the treaties, and the constitution of the United States” would intuitively apply the
final qualifying phrase “of the United States” to all of the items in the list. 577 U.S. at
10 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
352 (internal quotation marks omitted) (quoting Lockhart, 577 U.S. at 367 n.2 (Kagan, J.,
dissenting)). This is “because (among other things) laws, treaties, and the constitution are
often cited together, because readers are used to seeing ‘of the United States’ modify
each of them, and because the listed items are simple and parallel without unexpected
internal modifiers or structure.” Id.
Similarly, when a deduction is allowed for ‘“compensation for health care
services covered under . . . medical assistance, children’s health, or other program under
chapter 74.09 RCW,”’ the series qualifier rule applies so that the final modifier, “under
chapter 74.09 RCW” applies to all of the items in the list. PeaceHealth, 196 Wn.2d at 8-
9 (quoting RCW 82.04.4311). Notably, both programs fall under chapter 74.09 RCW,
and the modifier makes sense when it is applied to each of the items in the series. Id. at
9.
By contrast, when a statute proves a sentencing enhancement for convictions
“relating to aggravated sexual abuse, sexual abuse, or abusive sexual conduct involving a
minor or ward,” the final modifier “involving a minor or ward” applies only to that last
antecedent because the listed items are not often listed together and readers are not
accustomed to applying the modifier to each listed item. Lockhart, 577 U.S. at 352. In
addition, “the varied syntax of each item in the list makes it hard for the reader to carry
the final modifying clause across all three.” Id.
11 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
3. PLAIN LANGUAGE ANALYSIS OF RCW 82.12.022(1)
Under RCW 82.12.022, use tax is imposed on natural gas consumed in
Washington State unless an exemption applies. RCW 82.12.9651(1) provides a use tax
exemption for gases and chemicals “used by a manufacturer . . . in the production of
semiconductor materials.” In full, the exemption statute provides:
The provisions of this chapter do not apply with respect to the use of gases and chemicals used by a manufacturer or processor for hire in the production of semiconductor materials. This exemption is limited to gases and chemicals used in the production process to grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product, and other such uses whereby the gases and chemicals come into direct contact with the product during the production process, or uses of gases and chemicals to clean the chambers and other like equipment in which such processing takes place. For purposes of this section, “semiconductor materials” has the meaning provided in RCW 82.04.2404[4] and 82.04.294(3).[5]
REC contends that the phrase “whereby the gases and chemicals come into direct
contact with the product during the production process” qualifies only “other such uses”
whereas the Department argues that it qualifies the preceding list of uses.
4 RCW 82.04.2404 defines semiconductor materials as “silicon crystals, silicon ingots, raw polished semiconductor wafers, and compound semiconductor wafers.” 5 RCW 82.04.294(3) provides that “[s]ilicon solar wafers, silicon solar cells, thin film solar devices, solar grade silicon, or compound semiconductor solar wafers are ‘semiconductor materials’ for the purposes of RCW 82.08.9651 and RCW 82.12.9651.”
12 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
We start with the language of the statute. Gray, 181 Wn.2d at 339. The
exemption applies to the use of gases or chemicals used in the production process of
semiconductor materials. As the Department points out, the statute specifies that the
exemption is “limited” to certain uses. RCW 82.12.9651(1). The statute goes on to
provide a series of infinitive phrases that describe how the gas must be used in order to
qualify for the exemptions, i.e., “to grow,” “to etch,” “to anneal.” The parties agree that
the fifth phrase “other such uses” is a catchall phrase that is defined by the preceding list.
In other words, “other such uses” must be similar to the preceding list of uses. The term
“whereby,” however, is used as a relative adverb that describes “other such uses.” NEW
OXFORD AMERICAN DICTIONARY 1968 (3d ed. 2010); THIRD NEW INTERNATIONAL
DICTIONARY 2602 (1993). As written, the phrase following “whereby” most naturally
modifies only “other such uses,” and not the entire preceding series.
The structure of the sentence also supports our reading. Read as a whole, the
exemption is broken up into three distinct sections. First, gases used “in the production
process” for certain listed purposes qualify for the exemption. RCW 82.12.9651(1).
Second, the exemption can apply to “other such uses” but only when the gases are used
“during the production process,” and only when the gases come into direct contact with
the product. Id. Finally, the exemption applies after the production process, when gases
are used to clean the equipment “in which such processing takes place.” Id.
13 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
The statute’s use of two distinct phrases—“in the production process” and “during
the production process”—reflects an intentional distinction. At the beginning of the
sentence, the enumerated exemptions are limited to gases used “in” the production
process. The structure then shifts away from infinitive phrases and includes “other such
uses whereby the gases and chemicals come into direct contact with the product during
the production process.” RCW 82.12.9651(1) (emphasis added). Using a gas “in the
production process” suggests a broader functional limitation whereas using a gas “during
the production process” indicates a narrower temporal limitation. If the “whereby”
clause applied to the entire list, it would arguably create an internal conflict. On the other
hand, if the two phrases were intended to have the same meaning, then applying the
“whereby” clause to the entire list creates a redundancy.
The Department contends that the statute’s last clause—allowing an exemption for
“uses of gases and chemicals to clean the chambers and other like equipment”—supports
applying the “direct contact” requirement to all preceding uses. It argues that because
chamber-cleaning does not involve direct contact with the product, the legislature
separated this clause to preserve a narrow exception for a non-contact use. In the
Department’s view, this separation only makes sense if direct contact is required for all
prior production-related uses. However, as we noted above, the final clause is distinct
not because it lacks direct contact, but because it occurs after the production process.
14 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
The last antecedent rule also reinforces our interpretation. Under this rule, the
qualifying phrase “whereby the gases and chemicals come into direct contact with the
product during the production process” refers to only the last antecedent “other such
uses,” and does not apply to the entire series. Similarly, the lack of a comma between
“other such uses” and “whereby” reinforces that the qualifier is intended to apply only to
the last antecedent.
The Department argues that the plain language of the statute requires a different
result and contends that we should reject the last antecedent rule in favor of the series
qualifier rule. We disagree.
The series qualifier rule does not enhance a natural reading of the statute. Under
this rule, the qualifier following “whereby” would apply to the entire series of items, not
just “other such uses.” While the enumerated uses in the statute are generally parallel,
the syntax is varied making it difficult and unnatural for the reader to apply the final
modifying clause to each enumerated use. See, e.g., PeaceHealth, 196 Wn.2d at 9
(applying the modifier “program under chapter 74.09 RCW” to each item in the series).
Similarly, attempting to extend the “whereby” clause across the complex list of items in
the statute “would be cognitively burdensome.” See Lockhart, 577 U.S. at 351.
Applying the modifier to each listed item would read like this: “This exemption is limited
to gases and chemicals used in the production process . . . to grow the product . . .
15 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
whereby the gases and chemicals come into direct contact with the product during the
production process.”
The Department contends that PeaceHealth controls this case and requires that we
apply the series qualifier rule to hold that the “direct contact” qualifier applies to the
entire list of uses. In PeaceHealth, our Supreme Court applied the series-qualifier rule to
a statute providing a deduction for “‘compensation for health care services covered under
. . . medical assistance, children’s health, or other program under chapter 74.09 RCW.’”
196 Wn.2d at 8 (quoting RCW 82.04.4311). Although the last antecedent rule would
typically apply because no comma preceded the qualifying phrase, the court applied the
series-qualifier rule instead. Id. at 9-10. It did so citing “context of the contested clause
and the broader statutory scheme as a whole,” and the fact that all the programs listed
were programs under the same chapter. Id. at 11. To demonstrate application of the rule
to this statute, the court applied the contested modifier to each item in the list. Id. at 9-10.
The syntax of the statute in PeaceHealth is distinguishable. In PeaceHealth, the
statute had a short parallel list followed by a clearly placed qualifier that naturally and
grammatically applied to each item. In contrast, RCW 82.12.9651(1) uses a complex
sentence containing (according to the Department) eight uses followed by a distinctive
noun phrase which is then qualified by a “whereby” clause that is grammatically and
structurally separated from the earlier items.
16 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
The Department’s reliance on Paroline is similarly unpersuasive. In Paroline, the
United States Supreme Court interpreted a federal restitution statute that required courts
to order restitution in the “full amount of the victim’s losses,” including enumerated
categories such as medical services, therapy, and lost income, followed by a “catchall
category for ‘any other losses suffered by the victim as a proximate result of the
offense.’” 572 U.S. at 446 (quoting former 18 U.S.C. § 2259(b)(3) (1996)). The Court
held that the proximate cause requirement applied to all categories, not just the final
catchall. Id. at 447-48. It relied on the canon of construction that: “ʻ[w]hen several
words are followed by a clause which is applicable as much to the first and other words
as to the last, the natural construction of the language demands that the clause be read as
applicable to all.’” Id. at 447 (quoting Porto Rico Railway, Light & Power Co. v. Mor,
253 U.S. 345, 348, 40 S. Ct. 516, 64 L. Ed. 944 (1920)). But the Court further
emphasized that proximate cause is a well-established and widely understood principle in
criminal and tort law, making it natural and appropriate to read as applying uniformly to
the listed losses. Id. at 446-48.
Here, by contrast, there is no indication in the statutory text that “direct contact” is
an inherent or assumed requirement across the listed semiconductor production uses. Nor
does the statute establish “direct contact” as a baseline or background principle of
semiconductor manufacturing. Thus, unlike in Paroline, the listed uses in RCW
82.12.9651(1) do not share a common attribute that supports extending the qualifying
17 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
language across the series. Accordingly, Paroline offers no support for applying the
series-qualifier rule to this statute.
Next, the Department argues that the last antecedent rule should not be applied
because it would contradict other language in the statute. Specifically, the Department
contends that applying the last antecedent rule would conflict with the statute’s
requirement that the exemption be “limited.” We agree that use of this term demonstrates
an intent to limit the exemption, but it does not override the sentence structure and
syntax. The verb “limited to” narrows the exemption to the qualifying uses; it does not
impose unexpressed conditions on the qualifying uses. The statute is unquestionably
limited in scope, but the question is how it is limited—not whether it is. The
Department’s argument conflates the existence of a limitation with the separate question
of how the “direct contact” clause functions within the statute’s structure.
As a corollary argument, the Department contends that REC’s interpretation of the
statute is so broad that the exemption would apply to any use of gases or chemicals
without limitation or qualification. We disagree. The plain language of the statute
provides limitations and narrows the scope. The exemption does not include all uses,
only those integral to the production process and used either in, during, or after the
process.
18 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
4. THE LEGISLATURE’S EXPLICIT INTENT SUPPORTS APPLICATION OF THE LAST ANTECEDENT RULE
“ʻUltimately, in resolving a question of statutory construction, this court will
adopt the interpretation which best advances the legislative purpose.’” Portugal v.
Franklin County, 1 Wn.3d 629, 650, 530 P.3d 994 (2023) (quoting Bennett v. Hardy, 113
Wn.2d 912, 928, 784 P.2d 1258 (1990)).
RCW 82.12.9651 was enacted in 2006 as part of a broader legislative effort to
promote investment in Washington’s semiconductor manufacturing industry and enhance
the state’s competitiveness. See LAWS OF 2006, ch. 84, §§ 1, 4. In enacting the
exemption, the legislature identified the semiconductor industry as a key “industry
cluster” for Washington’s economy and determined that targeted tax incentives were
necessary to retain and attract advanced manufacturers. LAWS OF 2006, ch. 84, § 1 (“Tax
incentives for the semiconductor cluster are important in both retention and expansion of
existing businesses and attraction of new businesses, all of which will strengthen this
cluster.”).
The legislature has reaffirmed the statutory language and policy choice multiple
times. Since its enactment, the substance of RCW 82.12.9651(1) has remained
unchanged, even as the legislature has extended the exemption multiple times, most
recently through 2034. Compare former RCW 82.12.9651(1) (2006) with RCW
82.12.9651(1); see also LAWS OF 2024, ch. 261, § 12(5). If the legislature had intended
19 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
to impose a universal “direct contact” requirement, it had ample opportunity to do so. It
did not.
Subsequent enactments further support the legislature’s intent. In 2017, the
legislature extended the statute in part to “maintain and grow jobs in the semiconductor
cluster” and specifically emphasized the importance of “business in the solar silicon
manufacturing cluster.” See LAWS OF 2017, 3d Spec. Sess., ch. 37, § 401(3); RCW
82.04.2404 (official notes). That legislative intent is directly relevant to this case. REC’s
use of natural gas during the growth and annealing of solar grade silicon is undisputedly
part of the core manufacturing process for semiconductor materials.
The Department’s interpretation would exclude such uses based solely on whether
the gas physically touches the product, even when those processes are expressly listed in
the statute. That reading undermines the legislature’s stated intent. By contrast, REC’s
interpretation, which gives full effect to the enumerated uses while preserving the
limiting function of the “direct contact” clause in the catchall, is textually faithful and
aligned with the legislature’s intent.
5. THE DEPARTMENT’S LEGISLATIVE HISTORY ARGUMENT IS UNPERSUASIVE
Although the statute is unambiguous and we therefore need not resort to extrinsic
aids such as legislative history, the Department’s legislative history argument is not
persuasive. The Department relies heavily on the history of RCW 82.12.970, a related
20 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
statute enacted three years earlier, to argue that RCW 82.12.9651 imposes a universal
“direct contact” requirement.
The Department points out that RCW 82.12.970 and RCW 82.12.9651 contain
nearly identical language regarding the scope of the exemption. Both statutes limit the
use tax exemption to gases and chemicals “used in the [production/manufacturing]
process to grow the product, deposit or grow permanent or sacrificial layers on the
product, to etch or remove material from the product, to anneal the product, to immerse
the product, to clean the product, and other such uses whereby the gases and chemicals
come into direct contact with the product.” RCW 82.12.9651(1),.970(1).
However, the Department’s argument does not rely on the text of RCW 82.12.970.
Instead, it relies on a striking amendment adopted during the 2003 legislative session,
which described the bill as providing “use tax exemptions for gases and chemicals
directly used in production.” Resp’t Br. at 48-49 (quoting Amend. 5725 AMH GOMB
H3039.5 to S.B. 5725, at 11-12, 58th Leg., Reg. Sess. (Wash. 2003). But the “directly
used” phrase does not appear in the final enacted language of either statute. RCW
82.12.970,.9651. Both statutes instead use the phrase “come into direct contact with the
21 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
product.” Id. (emphasis added). The Department does not offer a compelling argument
that “directly used” is synonymous with “direct contact.”6
The Department also cites a fiscal note prepared in connection with the 2006
legislation, which paraphrases the statute at issue as exempting gases “used to grow,
make deposits on, etch, anneal, clean, and otherwise directly come in contact with the
product.” Resp’t Br. at 50. But this summary essentially restates the statutory language
without resolving the core interpretive question—whether the direct contact requirement
modifies only the final phrase or the entire list. Thus, the fiscal note is not helpful to the
Department.
Finally, the Department suggests that a uniform direct contact requirement
simplifies administration and provides a “bright-line rule.” But ease of administration
cannot justify reading limitations into a statute that the legislature did not adopt. Courts
do not rewrite unambiguous statutory language under the guise of interpretation. Cerrillo
v. Esparza, 158 Wn.2d 194, 201, 142 P.3d 155 (2006).
6 REC cites WAC 458-20-13601(8) defining “used directly” to argue that the phrase does not require physical contact. However, that WAC expressly applies only to the exemptions in RCW 82.08.02565 and RCW 82.12.02565. WAC 458-20-13601(1)(a). It does not interpret RCW 82.12.9651, and is not relevant to determining the scope of the “direct contact” requirement in that statute.
22 No. 40685-7-III REC Solar Grade Silicon, LLC v. Wash. Dep’t of Revenue
We conclude that the Board erroneously interpreted and applied the use tax
exemption in RCW 82.12.9651. The plain language of the statute and its legislative
intent support application of the last antecedent rule—not the series qualifier rule. Under
the correct interpretation, the phrase “whereby the gases and chemicals come into direct
contact with the product” modifies only the final catchall clause—“other such uses”—
and does not modify the six specifically enumerated production processes.
We reverse and remand to the Board for further proceedings consistent with this
opinion.
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
_________________________________ Staab, A.C.J.
WE CONCUR:
_________________________________ Fearing, J.
_________________________________ Cooney, J.