IN THE SUPREME COURT OF THE STATE OF WASHINGTON

PEACEHEALTH ST. JOSEPH MEDICAL ) 

CENTER AND PEACEHEALTH ST. JOHN ) No. 97557-4 

MEDICAL CENTER, ) 

) En Banc

Petitioner, ) 

v. )

) Filed_____________________

STATE OF WASHINGTON, ) 

DEPARTMENT OF REVENUE, )

)

Respondent. ) 

_____________________________________) 

OWENS, J. ― RCW 82.04.4311 provides a business and occupation (B&O) 

tax deduction to public and nonprofit hospitals on compensation they receive from 

both Washington State and the federal government for health care services subsidized 

under certain government-funded programs, such as Medicaid and Children’s Health 

Insurance Programs (CHIP). Petitioners PeaceHealth St. Joseph Medical Center and 

PeaceHealth St. John Medical Center (PeaceHealth) argue that, under RCW 

82.04.4311’s plain language, qualifying Washington hospitals are entitled to a B&O 

tax refund and deduction on compensation they receive from any state’s CHIP or 

August 6, 2020

FILE 

IN CLERK’S OFFICE

SUPREME COURT, STATE OF WASHINGTON 

AUGUST 6, 2020 

THIS OPINION WAS FILED 

FOR RECORD AT 8 A.M. ON

AUGUST 6 2020

SUSAN L. CARLSON 

SUPREME COURT CLERK 
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

2

Medicaid programs, not just Washington’s. PeaceHealth alternatively argues that by

excluding compensation that qualifying Washington hospitals receive from other 

states’ CHIP and Medicaid programs, the department unlawfully penalizes those 

hospitals that serve out-of-state patients, thus violating the dormant Commerce Clause

of the United States Constitution.

In holding that RCW 82.04.4311’s deduction excludes compensation that 

qualifying hospitals receive from other states’ CHIP and Medicaid programs, the 

Court of Appeals used the series-qualifier rule of statutory construction (in which a 

postpositive modifier normally applies to all nouns or verbs in a series when there is a 

straightforward, parallel construction) in lieu of the last antecedent rule (in which 

qualifying words or phrases modify only the immediately preceding words or 

phrases). We hold that the Court of Appeals properly applied the series-qualifier rule 

to delimit the scope of RCW 82.04.4311’s deduction, thus we affirm the Court of 

Appeals’ reasoning on this issue. Additionally, because we find that RCW 

82.04.4311 supports a traditional government function without any differential 

treatment favoring local private entities over similar out-of-state interests, we hold 

that RCW 82.04.4311 is constitutional under the government function exemption to

the dormant Commerce Clause.
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

3

FACTS

In 1980, the legislature enacted former RCW 82.04.4297, which created a B&O 

tax exemption for “amounts received from the United States” or “from the state of 

Washington . . . as compensation for, or to support, health or social welfare services 

rendered by a health or social welfare organization” (i.e., Medicaid). LAWS OF 1980, 

ch. 37, § 17. This original deduction was limited to compensation received from 

Washington State and the federal government and did not cover compensation

received from other states’ health care programs.

1 See id.

In subsequent years, the legislature observed that third-party-managed health 

care organizations had assumed an increasingly greater role in the provision and

disbursement of covered benefits, leading to a decrease in direct payments from both

the federal government and Washington to qualifying hospitals. See LAWS OF 2002, 

ch. 314, § 1. The legislature concluded that “the tax status of these amounts should 

not depend on whether the amounts are received directly from the qualifying program 

or through a managed health care organization under contract to manage benefits for a 

qualifying program.” Id. Thus, the legislature amended RCW 82.04.4297 and created 

RCW 82.04.4311. See id. §§ 1-3. That revised statute, under which PeaceHealth 

brings this current action, now states that

 1

 Nonprofit hospitals, like those managed by PeaceHealth, were exempt from paying any 

B&O taxes until 1993. LAWS OF 1993, ch. 492, § 305.
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

4

[a] public . . . or a nonprofit hospital . . . may deduct from the measure of 

tax amounts received as compensation for health care services covered under 

the federal medicare program authorized under Title XVIII of the federal social 

security act; medical assistance, children’s health, or other program under 

chapter 74.09 RCW; or for the state of Washington basic health plan under 

chapter 70.47 RCW.

RCW 82.04.4311 (emphasis added).

PeaceHealth applied for a refund from the Department of Revenue for the 

period of December 1, 2007, through December 31, 2008, seeking a deduction for all 

taxes paid on out-of-state Medicaid and CHIP revenue during this time period. 

PeaceHealth relies on the second clause of RCW 82.04.4311, which entitles

qualifying hospitals to claim a B&O deduction on compensation received under 

“medical assistance, children’s health, or other program under chapter 74.09 RCW.”2

The department denied PeaceHealth’s request, reasoning that RCW 82.04.4311’s 

deduction for compensation received from CHIP and Medicaid programs authorized 

“under chapter 74.09 RCW” necessarily excludes compensation received from other 

states’ CHIP and Medicaid programs. PeaceHealth appealed the department’s 

decision to the Board of Tax Appeals, and the board granted PeaceHealth’s motion for 

summary judgment, holding that PeaceHealth was entitled to the deduction. The 

department petitioned for judicial review, and the superior court reversed the board’s 

 2

 For purposes of this opinion, we recognize that RCW 82.04.4311’s discussion of “medical 

assistance” and “children’s health” programs are references to Medicaid and CHIP. See 

RCW 74.09.500, .470(1).
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

5

decision. The Court of Appeals affirmed, PeaceHealth St. Joseph Med. Ctr. v. Dep’t 

of Revenue, 9 Wn. App. 2d 775, 785, 449 P.3d 676 (2019), and PeaceHealth

petitioned for review, which was granted. PeaceHealth St. Joseph Med. Ctr. v. Dep’t 

of Revenue, 194 Wn.2d 1016 (2020).

ANALYSIS

1. RCW 82.04.4311’s Deduction Does Not Extend to Compensation That 

Qualifying Hospitals Receive from Other States’ Medicaid and CHIP programs

The party seeking a tax deduction bears the burden of showing that it is entitled 

to the benefit sought, and any doubt or ambiguity as to the availability of a statutory

benefit is “to be construed strictly, though fairly and in keeping with the ordinary 

meaning of [the statute’s] language, against the taxpayer.” Group Health Coop. of 

Puget Sound, Inc. v. Wash. State Tax Comm’n, 72 Wn.2d 422, 429, 433 P.2d 201

(1967).

We review questions of statutory interpretation de novo and interpret statutes 

so as to give effect to the legislature’s intentions. State v. Bunker, 169 Wn.2d 571, 

577-78, 238 P.3d 487 (2010). We derive legislative intent solely from the plain 

language of the statute, considering the text of the provision, the context of the statute, 

related provisions, amendments, and the statutory scheme as a whole. First Student, 

Inc. v. Dep’t of Revenue, 194 Wn.2d 707, 710, 451 P.3d 1094 (2019) (citing

Cashmere Valley Bank v. Dep’t of Revenue, 181 Wn.2d 622, 631, 334 P.3d 1100 

(2014)). We regularly employ traditional rules of grammar when discerning a 
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

6

statute’s plain language. Bunker, 169 Wn.2d at 578. When a statute’s plain language 

is unambiguous, meaning it is subject to only one reasonable interpretation, our

inquiry ends, and we will not resort to interpretive tools such as legislative 

history. Spokane County v. Dep’t of Fish & Wildlife, 192 Wn.2d 453, 458, 430 P.3d 

655 (2018) (citing State v. Velasquez, 176 Wn.2d 333, 336, 292 P.3d 92 (2013)).

The contested clause in RCW 82.04.4311 establishes a deduction for 

“compensation for health care services covered under . . . medical assistance, 

children’s health, or other program under chapter 74.09 RCW.” PeaceHealth argues 

that we should apply the last antecedent rule when interpreting this provision. The 

“last antecedent rule” states that qualifying words or phrases modify only those words 

or phrases that immediately precede them. BLACK’S LAW DICTIONARY 1598-99 (11th 

ed. 2019). As applied here, the phrase “under chapter 74.09 RCW” would modify 

only the immediately preceding phrase “other program” and would not be read to 

modify “medical assistance” or “children’s health.” Consequently, under this reading,

compensation that qualifying hospitals receive from any state’s CHIP or Medicaid 

programs would theoretically qualify for the statutory deduction.

Conversely, citing “the overall structure of Washington’s subsidized health 

programs within chapter 74.09 RCW,” the Court of Appeals applied the seriesqualifier rule. PeaceHealth, 9 Wn. App. 2d at 780. This rule provides that “when 

there is a straightforward, parallel construction that involves all nouns or verbs in a 
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

7

series, a prepositive or postpositive modifier normally applies to the entire 

series.” BLACK’S LAW DICTIONARY, supra, 1642. Applied here, the contested clause

is understood to read “medical assistance [program under chapter 74.09 RCW], 

children’s health [program under chapter 74.09 RCW], or other program under 

chapter 74.09 RCW.” RCW 82.04.4311. Accordingly, under this reading, RCW 

82.04.4311’s deduction excludes compensation hospitals receive from other states’ 

CHIP or Medicaid programs.

Analyzing both the context of the contested clause and the broader statutory 

scheme of RCW 82.04.4311 as a whole, we hold that the Court of Appeals properly 

applied the series-qualifier rule. See Lockhart v. United States, ___ U.S. ___, 136 S. 

Ct. 958, 963, 194 L. Ed. 2d 48 (2016) (analyzing both the context of the provision and 

the broader statutory scheme). Washington’s CHIP and Medicaid programs are both

“program[s] under chapter 74.09 RCW”—Washington’s Medicaid program is 

established under RCW 74.09.500 and CHIP is established under RCW 74.09.470(1). 

Furthermore, as the remaining phrase “other program” indicates, chapter 74.09 RCW 

also establishes a number of “other” Washington-State-funded health care programs. 

See, e.g., RCW 74.09.035(1) (authorizing medical care services to persons eligible for 

the aged, blind, or disabled assistance program authorized under RCW 74.62.030, or

eligible for essential needs and housing support under RCW 74.04.805), .800

(establishing the maternity care access program). Thus, within the context of the 
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

8

contested clause, the modifier “program under chapter 74.09 RCW” makes sense 

when it is uniformly applied to all of the items in the series: medical assistance 

(Medicaid), children’s health (CHIP), and these other programs. See Paroline v. 

United States, 572 U.S. 434, 447, 134 S. Ct. 1710, 188 L. Ed. 2d 714 (2014) (“‘When 

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.’” (quoting Porto Rico Ry., Light & Power Co. v. 

Mor, 253 U.S. 345, 348, 40 S. Ct. 516, 64 L. Ed. 944 (1920))).

Likewise, our analysis of the structure of the statute in which this contested 

provision is located further supports our applying the series-qualifier rule. 

Semicolons divide RCW 82.04.4311 into three categories: (1) the Medicare program 

“under Title XVIII of the federal social security act;” (2) medical assistance, 

children’s health, or other program “under chapter 74.09 RCW;” and 

(3) Washington’s basic health plan “under chapter 70.47 RCW.” As the department 

argues, and as the Court of Appeals correctly held, these parallel statutory references 

to “under Title XVIII,” “under chapter 70.47 RCW,” and “under chapter 74.09 RCW” 

show that the overall structure of the statute supports the application of the seriesqualifier rule in this instance. Analyzing RCW 82.04.4311 as a whole—three parallel 

provisions, each referencing the law authorizing the identified programs therein—the 

contested provision is subject to only one reasonable interpretation.
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

9

PeaceHealth cites to the United States Supreme Court’s decision in Lockhart to 

argue that the Court of Appeals erred by not first applying the last antecedent rule 

“and showing that it did not work” before resorting to applying the series-qualifier 

rule. Appellants’ Suppl. Br. at 15. But, contrary to PeaceHealth’s argument, we need 

not always first attempt to apply the last antecedent rule, abandoning it only when the 

rule’s application “produces a nonsensical result.” Id. Even the fact that a statute 

makes grammatical sense under the last antecedent rule does not mandate the rule’s

application. Nobelman v. Am. Sav. Bank, 508 U.S. 324, 330, 113 S. Ct. 2106, 124 L. 

Ed. 2d 228 (1993). As the Court in Lockhart reasoned, and as the Court of Appeals 

below recognized, “the rule of the last antecedent ‘is not an absolute and can 

assuredly be overcome by other indicia of meaning.’” 136 S. Ct. at 963 (quoting 

Barnhart v. Thomas, 540 U.S. 20, 26, 124 S. Ct. 376, 157 L. Ed. 2d 333 (2003)).

PeaceHealth, as the taxpayer, bears the burden of showing that it is entitled to 

the deduction sought, and applying the series-qualifier rule is in keeping with our 

responsibility to strictly but fairly construe the availability of the statutory benefit 

against the taxpayer. See Group Health Coop., 72 Wn.2d at 429. As shown here, our 

analysis of both the context of the contested provision and the broader statutory 

scheme as a whole in which this provision is located show that the Court of Appeals 

correctly applied the series-qualifier rule when interpreting the scope of RCW 
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

10

82.04.4311’s deduction, which excludes compensation qualifying hospitals receive 

from other states’ CHIP and Medicaid programs.

3

2. RCW 82.04.4311’s Limited Deduction Is Constitutional under the Government 

Function Exemption to the Dormant Commerce Clause

The Commerce Clause grants Congress the power to “regulate commerce . . . 

among the several states.” U.S. CONST., art. I, § 8, cl. 3. The negative implication of 

this constitutional grant of power to Congress, the dormant Commerce Clause,

“significantly limits the ability of States and localities to regulate or otherwise burden 

the flow of interstate commerce.” Maine v. Taylor, 477 U.S. 131, 151, 106 S. Ct. 

2440, 91 L. Ed. 2d 110 (1986). The dormant Commerce Clause was born out of a 

concern of “‘economic protectionism—that is, regulatory measures designed to 

benefit in-state economic interests by burdening out-of-state competitors.’” 

McBurney v. Young, 569 U.S. 221, 235, 133 S. Ct. 1709, 185 L. Ed. 2d 758 (2013)

(quoting New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 273-74, 108 S. Ct. 1803, 

 3

 PeaceHealth and amici rely heavily on select language in the legislative findings to argue 

that RCW 82.04.4311 should be read broadly to apply to compensation received from all 

states’ CHIP and Medicaid programs, not just Washington’s, relying on legislative findings 

in LAWS OF 2002, ch. 314, § 1. But when a statute’s plain language is unambiguous, our

inquiry into the statute’s meaning ends. Spokane County, 192 Wn.2d at 458. A statement of 

legislative intent “does not trump the plain language of the statute,” and such statements are 

not controlling even when the codified intent of the legislature speaks directly to the enacted 

statute. State v. Reis, 183 Wn.2d 197, 212, 351 P.3d 127 (2015) (quoting Kilian v. Atkinson,

147 Wn.2d 16, 23, 50 P.3d 638 (2002) (plurality opinion)). Under RCW 82.04.4311’s plain 

language, “medical assistance, children’s health, or other program” unambiguously form a 

single category of programs all modified by the phrase “under chapter 74.09 RCW,” which 

limits the deduction to compensation received from Washington, not other states. 
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

11

100 L. Ed. 2d 302 (1988)). Accordingly, “the dormant Commerce Clause precludes 

States from ‘discriminat[ing] between transactions on the basis of some interstate 

element.’” Comptroller of Treasury v. Wynne, 575 U.S. 542, 549, 135 S. Ct. 1787, 

191 L. Ed. 2d 813 (2015) (alteration in original) (quoting Bos. Stock Exch. v. State 

Tax Comm’n, 429 U.S. 318, 332 n.12, 97 S. Ct. 599, 50 L. Ed. 2d 514 (1977)). This 

means that, barring some exception, a state “‘may not tax a transaction or incident 

more heavily when it crosses state lines than when it occurs entirely within the 

State.’” Id. (quoting Armco Inc. v. Hardesty, 467 U.S. 638, 642, 104 S. Ct. 2620, 81 

L. Ed. 2d 540 (1984)). “That the tax discrimination comes in the form of a 

deprivation of a generally available tax benefit” is of no consequence, nor does it 

matter if the discriminatory burden is only indirectly imposed on the out-of-state 

customer by means of a tax on the entity transacting business. Camps 

Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564, 578, 580, 117 S. Ct. 

1590, 137 L. Ed. 2d 852 (1997).

However, despite these general prohibitions, an exemption to the dormant 

Commerce Clause exists for when the government is performing a traditional 

government function. United Haulers Ass’n v. Oneida-Herkimer Solid Waste Mgmt. 

Auth., 550 U.S. 330, 343, 127 S. Ct. 1786, 167 L. Ed. 2d 655 (2007).
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

12

We hold that RCW 82.04.4311 is constitutional under the government function 

exemption to the dormant Commerce Clause.

4 The United States Supreme Court first 

applied the government function exemption in 2007 in United Haulers, and the 

present case marks the first time that we have been asked to apply this relatively new 

principle of Commerce Clause jurisprudence. The government function exemption is 

premised on the Court’s understanding that laws that discriminate in favor of local 

government may be directed toward any number of legitimate goals unrelated to the 

general protectionism that the Commerce Clause forbids. Id. Thus, under this 

exemption, laws that (1) benefit the exercise of a government function while 

(2) treating all other private entities the same are constitutional under the Commerce 

Clause. Id.

In United Haulers, the Court upheld a series of New York county ordinances

that required trash haulers to deliver waste to state-owned and operated waste 

processing facilities. Id. at 334. The Court held that the challenged flow-control 

ordinances were constitutional because they favored a clearly public enterprise—

government-operated waste processing—while treating all other private economic 

interests the same. Id. at 342. As the Court explained, “‘any notion of discrimination 

 4

 Because we find the statute constitutional under the government function exemption, we 

do not address whether the statute would also be constitutional under the market participant 

exemption, which allows states to discriminate in favor of their own citizens provided the 

state is acting as a participant in the relevant market rather than a market regulator. Reeves, 

Inc. v. Stake, 447 U.S. 429, 437, 100 S. Ct. 2271, 65 L. Ed. 2d 244 (1980).
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

13

assumes a comparison of substantially similar entities[,]’ [b]ut States and 

municipalities are not private businesses.” Id. (citation omitted) (quoting Gen. Motors

Corp. v. Tracy, 519 U.S. 278, 298, 117 S. Ct. 811, 136 L. Ed. 2d 761 (1997)). This is 

so because “[s]tate and local governments that provide public goods and services on 

their own, unlike private businesses, are ‘vested with the responsibility of protecting 

the health, safety, and welfare of [their] citizens.’” Dep’t of Revenue v. Davis, 553 

U.S. 328, 340, 128 S. Ct. 1801, 170 L. Ed. 2d 685 (2008) (second alteration in 

original) (quoting United Haulers, 550 U.S. at 342).

In Davis, the Court upheld a Kentucky income tax law that exempted from 

income any interest earned on municipal bonds issued by Kentucky while taxing as 

income any interest earned on bonds issued by any other state or private party. Id. at 

331-32. The Court recognized that issuing bonds was a “quintessentially public 

function” given that the issuance of debt securities allows local governments to pay 

for public projects. Id. at 342. Thus, the Court held the Kentucky law constitutional 

under the government function exemption because the “tax exemption favors a 

traditional government function without any differential treatment favoring local 

entities over substantially similar out-of-state interests.” Id. at 343. 

As the Court in Davis explained, the point of our inquiry into whether a

challenged statute or regulation supports a government function is “not to draw fine 

distinctions among governmental functions, but to find out whether the preference [is]
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

14

for the benefit of a government fulfilling governmental obligations or for the benefit 

of private interests, favored because they [are] local.” Id. at 341 n.9. Here, RCW 

82.04.4311 is analogous to the laws upheld in Davis and United Haulers because the 

deduction supports a quintessentially public function by helping to subsidize the 

government’s provision of essential health care services to Washington’s citizens by 

facilitating the expansion of the government’s overall purchasing power for such 

services.

In response, PeaceHealth argues that because RCW 82.04.4311 does not 

directly regulate the provision of health care subsidies or the rates at which they are 

set, upholding this indirect relationship between the government function and the 

challenged regulation would endorse an overexpansive reading of the government 

function exemption. But PeaceHealth’s focus on whether the deduction directly 

regulates Washington’s provision of health care subsidies misconstrues what courts 

consider when applying the government function exemption—only the market 

participant exemption asks whether there is a direct relationship between the 

challenged regulation and the government’s actions in the relevant market. See White 

v. Mass. Council of Constr. Emp’rs, Inc., 460 U.S. 204, 208, 103 S. Ct. 1042, 75 L. 

Ed. 2d 1 (1983) (holding that, to determine whether the market participant exemption 

applies, courts must analyze whether the challenged state program constitutes direct 
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

15

state participation in the market). No similar inquiry appears in the Court’s

discussions of the government function exemption.

Equally, if not more important to our dormant Commerce Clause analysis, 

PeaceHealth fails to identify any local private interests that are favored under the 

statute. Accordingly, we have little by way of either argument or evidence to rebut 

the conclusion that RCW 82.04.4311 permissibly “favors a traditional government 

function without any differential treatment favoring local entities over substantially 

similar out-of-state interests.” See Davis, 553 U.S. at 343 (emphasis added). To the 

contrary, PeaceHealth argues only that the challenged deduction disfavors both

Washington hospitals and Washington citizens. See, e.g., Pet. for Review at 17-18 

(arguing that RCW 82.04.4311 increases the cost of health care services generally in 

Washington).

Our review of Camps, on which PeaceHealth relies, helps highlight why RCW 

82.04.4311 does not favor local entities over substantially similar out-of-state 

interests. There, the Court found unconstitutional a Maine statute exempting charities

incorporated in the state from real estate and personal property taxes unless the charity 

was conducted or operated principally for the benefit of out-of-state residents. 

Camps, 520 U.S. at 568. Unlike the B&O deduction here, which is effectively 

calculated on a patient-by-patient basis, the unconstitutional statute in Camps operated 

in binary fashion, privileging only some in-state charities with a tax deduction while
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4

16

flat out denying others based on a threshold assessment of each charities’ total number 

of out-of-state clients served. Id. at 576 (finding Maine’s statute impermissibly 

discriminatory because the state “singl[ed] out camps that serve[d] mostly in-staters 

for beneficial tax treatment”). By outright exempting only some charities for 

differential taxation, the statute in Camps plainly treated competing private entities 

differently. However, the same cannot be said here, where every qualifying public 

and nonprofit Washington hospital, regardless its location or client population, is 

subject to the same exclusions on the scope of RCW 82.04.4311’s deduction.

In the context of both the design of Medicaid and similar government 

subsidized health care programs and the regional nature of health care services in 

general, PeaceHealth is free to question whether RCW 82.04.4311’s limited deduction 

is good policy, but absent evidence of impermissible protectionism, PeaceHealth fails 

to show what it must for us to find the statute unconstitutional under the dormant 

Commerce Clause.

CONCLUSION

Under the series-qualifier rule of statutory construction, RCW 82.04.4311’s

B&O tax deduction excludes compensation qualifying hospitals receive from other 

states’ CHIP and Medicaid programs. Additionally, because RCW 82.04.4311 

benefits a quintessential government function without any differential treatment 

favoring local private interests over out-of-state interests, we hold that RCW 
PeaceHealth St. Joseph Med. Ctr. v. Dep’t of Revenue

No. 97557-4 

17 

82.04.4311 is constitutional under the government function exemption of the dormant 

Commerce Clause. Accordingly, we affirm the Court of Appeals’ decision. 

WE CONCUR: