# REC Solar Grade Silicon, LLC v. Department of Revenue

> Court of Appeals of Washington · December 11, 2025

URL: https://www.frixlaw.com/law-library/cases/11219727

## Case

- **Court:** Court of Appeals of Washington
- **Decided:** December 11, 2025
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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STATE OF WASHINGTON, ) UNPUBLISHED OPINION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

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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.

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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.

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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.

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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).

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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).

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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

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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

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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

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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.

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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]

(Emphasis added.)

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.”

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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.

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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.

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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 . . .

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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.

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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

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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.

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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

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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

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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

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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.

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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.

23

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11219727. Public record. Not legal advice.