¶28 (dissenting) — RCW 82.04.423 is a narrow statutory exemption from business and occupation (B&O) tax for certain out-of-state direct sellers of consumer products, for example those whose business involves in-home sales of cosmetics or household products. By holding that Dot Foods, Inc., is entitled to this exemption notwithstanding that it makes sales through an entity that does not qualify as a “direct seller’s representative,” the majority expands the exemption well beyond its intended scope. RCW 82.04.423. I respectfully dissent.
¶29 Chapter 82.04 RCW provides a comprehensive scheme for B&O tax in Washington, under which “[t]axa*927tion is the rule and exemption is the exception.” Budget Rent-A-Car of Wash.-Or., Inc. v. Dep’t of Revenue, 81 Wn.2d 171, 174, 500 P.2d 764 (1972); see also RCW 82.04.220 (providing that every business must pay B&O tax on gross revenues). Because the statute at issue is a tax exemption, we construe it narrowly. Budget Rent-A-Car, 81 Wn.2d at 174-75. “A tax exemption presupposes a taxable status and the burden is on the taxpayer to establish eligibility for the benefit.” In re Sehome Park Care Ctr., Inc., 127 Wn.2d 774, 778, 903 P.2d 443 (1995). The Department of Revenue (Department) advances multiple reasons why Dot cannot meet this burden, but the first is dispositive: Dot does not make sales in Washington exclusively to or through a direct seller’s representative.
¶30 RCW 82.04.423 sets forth several conditions a taxpayer must meet in order to receive the tax exemption. At issue here is RCW 82.04.423(1)(d), which provides that the direct seller must “[m]ake[ ] sales in this state exclusively to or through a direct seller’s representative.” (Emphasis added.) In turn, RCW 82.04.423(2) defines “direct seller’s representative” as one who deals exclusively in consumer products. Specifically, a direct seller’s representative either buys consumer products on a buy-sell basis or a deposit commission basis for resale, or sells or solicits the sale of consumer products, in each case “in the home or otherwise than in a permanent retail establishment.” Id. There is no dispute that this exemption was designed to provide a tax exemption for those engaged in direct sales of consumer products, typically through in-home parties or door-to-door marketing. The record identifies some well-known direct selling companies, including Mary Kay, Avon, Pampered Chef, Longaberger, and Creative Memories. Clerk’s Papers at 201-02.
¶31 The majority reads the narrow tax exemption in RCW 82.04.423 to apply to Dot, which sells both consumer and nonconsumer products, reasoning that the only requirement is that the sales occur to or through Dot’s direct seller’s representative. See majority at 921. One flaw in this *928reasoning is that it regards Dot Transportation, Inc. (DTI) as a “direct seller’s representative” even though DTI does not meet the definition of a direct seller’s representative because it engages in the sale of nonconsumer products on behalf of Dot. The majority misreads the definition of direct seller’s representative to conclude that it is not limited to one who sells consumer products because the word “exclusively” is not contained in the statutory clause defining direct seller’s representative. Yet, this is not necessary when the definition of direct seller’s representative is by its terms restricted to one whose business activity involves a single category of goods — consumer products. If the legislature intended an out-of-state direct seller’s representative to also deal in nonconsumer products on behalf of the direct seller, it would have said as much. The majority reads the restriction out of the definition entirely. Under the majority’s reading, a seller whose business activity involves, for example, 99.9 percent nonconsumer products could claim the exemption so long as it included 0.1 percent consumer products in its sales. This greatly expands the narrow statutory exemption the legislature created.
¶32 The other flaw in the majority’s reasoning is that it ignores the structure of the statute setting forth the exclusivity conditions that must be met to qualify for the exemption. The statute must be read as a whole. See Davis v. Dep’t of Licensing, 137 Wn.2d 957, 970-71, 977 P.2d 554 (1999). The majority focuses solely on the condition in RCW 82.04.423(1)(d) that Dot’s sales must be exclusively to or through a direct seller’s representative, and concludes that “Dot is not disqualified from being exempt from Washington’s B&O tax to the extent any portion of its sales qualify for the exemption.” Majority at 921-22 (emphasis added). The majority does not explain what it means by “to the extent any portion of its sales qualify for the exemption,” but the implication is that the exemption applies to that portion of Dot’s sales involving consumer products. The majority notes that 99 percent of Dot’s sales are consumer products, and Dot argues that, at a minimum, it should be *929exempt from B&O tax as to these sales. See majority at 916; Suppl. Br. of Pet’r at 11; Br. of Appellant at 28-29; Pet. for Review at 9-10.5 Additionally, the majority emphasizes the statutory language providing that B&O tax “ ‘shall not apply to any person in respect to gross income derived from the business of making sales....’” Majority at 920 (quoting RCW 82.04.423(1)).
¶33 The problem with the majority’s reading of the statute is that RCW 82.04.423 provides no means for apportioning the B&O tax obligation between qualifying and nonqualifying business activity. Instead, the statute describes conditions that a person — not a particular business activity — must meet in order to qualify for the tax exemption. Each condition relates to the status of the qualifying out-of-state seller: the person must not (1) own or lease real property in Washington (RCW 82.04.423(1)(a)), (2) maintain a stock of tangible personal property in the state for sale in the ordinary course of business (RCW 82.04.423(1)(b)), or (3) be incorporated under the laws of the state (RCW 82.04.423(1)(c)), and must (4) make sales exclusively to or through a direct seller’s representative (RCW 82.04.423(1)(d)). These are all-or-nothing conditions, defining the limited nexus between the out-of-state seller and Washington that justifies the exemption. Nothing in the statutory language or structure suggests that a taxpayer who does not meet all of these conditions nonetheless qualifies for the tax exemption “to the extent” it has some business activity that does not involve these conditions.
¶34 Understood in context, therefore, the condition requiring the qualifying taxpayer to be engaged exclusively in sales to or through a direct seller’s representative cannot be read to allow for a partial tax exemption for sales of consumer goods. As with the other conditions, if the taxpayer does not meet all of the requirements for the exemp*930tion, it does not qualify. In this regard, it makes no difference that 99 percent of Dot’s sales were consumer products, just as it would not matter if 99 percent of the real property a taxpayer leased or owned were outside of the state of Washington.6
¶35 The majority makes much of the Department’s amendment of WAC 458-20-246 in 1999, which resulted in a revised interpretation of RCW 82.04.423 under which Dot no longer qualified for the tax exemption. The majority goes so far as to question the validity of this interpretive regulation, suggesting that “the more appropriate method to change the interpretation or application of a statute is by amendment or revision of the statute, rather than a new agency interpretation.” Majority at 921-22. This is dangerous language. Certainly, the executive branch has the constitutional authority to interpret and implement statutes within its purview and it is not required to seek a legislative change whenever it determines a prior interpretation was erroneous. Our deference to an agency’s interpretation of statutes within its area of expertise recognizes this constitutional authority. See Weyerhaeuser Co. v. Dep’t of Ecology, 86 Wn.2d 310, 314-17, 545 P.2d 5 (1976) (holding court must give considerable weight to agency’s interpretation of ambiguous statute absent compelling indication such interpretation conflicts with legislative intent). There is no support for the majority’s refusal to defer to the Department’s interpretation of RCW 82.04.423 because it would have preferred that the agency seek a legislative amendment instead of exercising its rule-making power. Instead, the Department’s interpretation of a statute that it is entrusted to administer is entitled to judicial deference. See id. at 314-15; accord Waste Mgmt. of Seattle, Inc. v. *931Utils. & Transp. Comm’n, 123 Wn.2d 621, 628, 869 P.2d 1034 (1994).7
¶36 I would affirm the Court of Appeals and hold that Dot does not qualify for the tax exemption under RCW 82.04.423 because it does not meet the exclusivity requirements of that statute.
Madsen, Chambers, and Owens, JJ., concur with Stephens, J.Reconsideration denied February 3, 2010.
Dot also argues that it qualifies for the exemption because its sales of nonconsumer products are “de minimis.” Suppl. Br. of Pet’r at 10; Pet. for Review at 10. The majority does not appear to endorse this view, and RCW 82.04.423 plainly does not contain a “de minimis” provision.
Amicus Melaleuca, Inc., argues that a direct seller should not be disqualified from receiving the tax exemption under RCW 82.04.423 simply because it sells marketing and sales materials to its representatives, in addition to consumer products. Amicus Curiae Br. of Melaleuca, Inc., at 16. This type of sale is not at issue in this case. Dot acknowledges that its sales of nonconsumer products do not involve marketing and sales materials. Dot Food’s Answer to Amicus Curiae Brs. at 7.
Moreover, the Department’s rule revising its interpretation of the statute is not focused on whether Dot’s sales of nonconsumer products disqualify it from receiving the tax exemption. As the majority acknowledges, the 1999 regulation was promulgated to address a different concern — whether the tax exemption applies when a direct seller’s products are sold in permanent retail establishments. The Department assessed B&O tax against Dot on this basis. The issue of Dot’s sales of nonconsumer products arose during the summary judgment proceedings in this case, when the Department argued this as a separate reason why Dot does not qualify for the direct seller’s tax exemption. Notably, Dot has not argued that the Department should be precluded by its prior conduct from raising this argument.