(1) The tax levied by RCW 82.08.020 does not apply to a grantee's receipt of amounts received as grants that are deductible under RCW 82.04.4339.
(2) Nothing in this section may be construed to:
(a) Imply that the tax levied by RCW 82.08.020 applies to any circumstance not described in subsection (1) of this section; or
(b) Provide an exemption from the tax levied by RCW 82.08.020 for the grantee's use of grant proceeds to acquire products in a transaction meeting the definition of "retail sale" in RCW 82.04.050.
(3) For purposes of this section, the following definitions apply:
(a) "Grantee" means the recipient of a grant deductible under RCW 82.04.4339.
(b) "Product" means the same as in RCW 82.32.023.