MARKMAN, J.
The Use Tax Act (UTA), MCL 205.91 et seq., imposes a 6% tax “for the privilege of using, storing, or consuming tangible personal property in this state . . . .” MCL 205.93(1). However, the UTA exempts from the use tax property sold to “[a]n industrial processor for use or consumption in industrial processing.” MCL 205.94o(l)(a). At issue here is whether and to what extent, if any, an electric utility is entitled to the industrial-processing exemption for tangible personal property located outside its generation plants. The Court of Appeals held that plaintiff was entitled to the full industrial-processing exemption for the property.
We hold that the property here is simultaneously used for exempt “industrial processing” activity under MCL 205.94o(7)(a) and nonexempt “distribution” and “shipping” activities under MCL 205.94o(6)(b). In these circumstances, the taxpayer is entitled to the industrial-processing exemption based on the “percentage of exempt use to total use determined by a reasonable formula or method approved by the [Department of Treasury].” MCL 205.94o(2). Accordingly, we affirm the judgment of the Court of Appeals in part, reverse in part, and remand to the Court of Claims for further proceedings.
[33] I. PACTS AND HISTORY
Plaintiff, Detroit Edison Company (DTE), is an electric utility that is responsible for generating, transmitting, and distributing electricity to residential, commercial, and industrial consumers. The electricity is initially generated at approximately 15,000 to 25,000 volts within each of plaintiffs generation plants. However, to transmit electricity throughout the electric system, plaintiff must then “step up” the voltage to between 115,000 and 500,000 volts as the electricity is transmitted from the generation plant to substations from which the electricity is then distributed to consumers.
Electricity is not usable at the high voltage levels at which it exists when it is initially generated and as it moves throughout the electric system. For instance, most residential consumers use electricity at the 120/240 volt1 level. For this reason, the electric system employs tangible personal property, such as transformers, at the substations to “step down” the voltage as the electricity nears the consumer. In addition to transformers, the electric system employs a variety of other tangible personal property, including fuses, circuit breakers, cables, and poles, to monitor the voltage levels and ensure that the consumer receives a useable product.
Defendant conducted a use-tax audit for the period between January 1, 2003, and September 30, 2006, and determined that plaintiff had a deficiency because it had claimed the industrial-processing exemption from the use tax for tangible personal property located [34] outside its generation plants.2 Accordingly, defendant issued a notice of intent to assess in the amount of $11,020,506 in tax plus interest—an amount that was subsequently corrected upward to $14,046,249 plus interest. Ultimately, defendant issued a final assessment in the amount of $13,102,133.54 plus interest. Plaintiff paid the deficiency under protest and filed suit in the Court of Claims, seeking a refund for the use tax and interest paid under protest, as well as statutory costs, interest, and attorney fees.3 The parties filed competing motions for summary disposition under MCR 2.116(C)(10). The Court of Claims eventually granted summary disposition in favor of plaintiff, reasoning that it was clear “that electricity is continuing to be processed up until the point at which it reaches the customer’s meter, because the voltage and current levels are drastically changed multiple times at set points, the last being at or near the customer’s meter . . . .”
Defendant appealed, and the Court of Appeals affirmed. Detroit Edison Co v Dep’t of Treasury, 303 Mich App 612; 844 NW2d 198 (2014). The Court of Appeals held that the “machinery and equipment are concurrently used in a unified system for purposes of both distribution and industrial processing. In such a situation, the caselaw is clear that the ‘industrial process-[35] mg’ exemption applies to the machinery and equipment in full.” Id. at 630. We granted defendant’s application for leave to appeal in this Court. Detroit Edison Co v Dep’t of Treasury, 497 Mich 873 (2014). Oral arguments were heard on April 7, 2015.
II. STANDARD OP REVIEW
“A trial court’s ruling on a motion for summary disposition is a question of law, which this Court reviews de novo.” Shepherd Montessori Ctr Milan v Ann Arbor Charter Twp, 486 Mich 311, 317; 783 NW2d 695 (2010). Questions of statutory interpretation are also reviewed de novo. Klooster v Charlevoix, 488 Mich 289, 295; 795 NW2d 578 (2011).
III. ANALYSIS
A. USE TAX AND EXEMPTION
The UTA “imposes a 6% tax on a consumer’s use, storage, and consumption of all tangible personal property in Michigan.” Andrie Inc v Dep’t of Treasury, 496 Mich 161, 164; 853 NW2d 310 (2014). At the time relevant to this case, MCL 205.93(1) of the UTA provided in pertinent part:
There is levied upon and there shall be collected from every person in this state a specific tax for the privilege of using, storing, or consuming tangible personal property in this state at a rate equal to 6% of the price of the property or services .... [As amended by 2002 PA 511.]
The UTA industrial-processing statute, MCL 205.94o, provided in pertinent part:
(1) The tax levied under this act does not apply to property sold to the following after March 30, 1999, subject to subsection (2):
[36] (a) An industrial processor for use or consumption in industrial processing.
(b) A person, whether or not the person is an industrial processor, if the tangible personal property is intended for ultimate use in and is used in industrial processing by an industrial processor.
(c) A person, whether or not the person is an industrial processor, if the tangible personal property is used by that person to perform an industrial processing activity for or on behalf of an industrial processor.
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(2) The property under subsection (1) is exempt only to the extent that the property is used for the exempt purpose stated in this section. The exemption is limited to the percentage of exempt use to total use determined by a reasonable formula or method approved by the department.
(3) Industrial processing includes the following activities:
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(d)Inspection, quality control, or testing to determine whether particular units of materials or products or processes conform to specified parameters at any time before materials or products first come to rest in finished goods inventory storage.
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(j) Production material handling.
(k) Storage of in-process materials.
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(6) Industrial processing does not include the following activities:
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[37] (b) Sales, distribution, warehousing, shipping, or advertising activities.
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(7) As used in this section:
(a) “Industrial processing” means the activity of converting or conditioning tangible personal property by changing the form, composition, quality, combination, or character of the property for ultimate sale at retail or for use in the manufacturing of a product to be ultimately sold at retail. Industrial processing begins when tangible personal property begins movement from raw materials storage to begin industrial processing and ends when finished goods first come to rest in finished goods inventory storage.
(b) “Industrial processor” means a person who performs the activity of converting or conditioning tangible personal property for ultimate sale at retail or use in the manufacturing of a product to be ultimately sold at retail. [As enacted by 1999 PA 117.]
“The industrial processing exemption is, in part, the product of a targeted legislative effort to avoid double taxation of the end product offered for retail sale or, in other terms, to avoid ‘pyramiding the use and sales tax.’ ” Elias Bros Restaurants, Inc v Treasury Dep’t, 452 Mich 144, 152; 549 NW2d 837 (1996), quoting Int’l Research & Dev Corp v Dep’t of Revenue, 25 Mich App 8, 13; 181 NW2d 53 (1970). “Pyramiding occurs when both use and sales taxes are imposed on the production and sale of retail goods.” Elias Bros, 452 Mich at 152. “[T]o determine whether the industrial processing exemption applies, it is necessary to consider the activity in which the equipment is engaged and not the character of the equipment-owner’s business.” Id. at 157 (emphasis added).
MCL 205.92 of the UTA specifically provides that electricity constitutes “tangible personal property.” Effective July 23, 2002, MCL 205.92(l) read as follows:
[38] “Tangible personal property” beginning September 20, 1999, includes electricity, natural or artificial gas, or steam and also the transmission and distribution of electricity used by the consumer or user of the electricity, whether the electricity is purchased from the delivering utility or from another provider. [As amended by 2002 PA 511.]
Effective September 1, 2004, MCL 205.92(k) reads as follows:
“Tangible personal property” means personal property that can be seen, weighed, measured, felt, or touched or that is in any other manner perceptible to the senses and includes electricity, water, gas, steam, and prewritten computer software. [As amended by 2004 PA 172.]
Accordingly, there is no dispute that electricity constitutes “tangible personal property” for purposes of the industrial-processing exemption.4 MCL 205.92. In addition, there is no dispute that plaintiff is an “industrial processor” because by generating electricity it “performs the activity of converting or conditioning tangible personal property for ultimate sale at retail . . . .” MCL 205.94o(7)(b). With that in mind, we address whether plaintiffs tangible personal property outside the generation plants is exempt from the use tax under the industrial-processing exemption.
We start with a discussion of “industrial processing” under MCL 205.94o(7)(a) and only then address MCL 205.94o(2) for three reasons. First, the introductory sentence of MCL 205.94o(2) provides that “[t]he property under subsection (1) is exempt only to the extent that the property is used for the exempt purpose stated [39] in this section.” Therefore, before addressing the second sentence of MCL 205.94o(2), it is initially necessary to assess whether and to what extent the property is used for the “exempt purpose,” i.e., industrial processing. This is the threshold inquiry required by the first sentence of MCL 205.94o(2), and MCL 205.94o(7)(a) defines “industrial processing.”
Second, the next sentence of MCL 205.94o(2) provides that “[t]he exemption is limited to the percentage of exempt use to total use determined by a reasonable formula or method approved by the department.” Thus, similarly to the introductory sentence of MCL 205.94o(2), the second sentence requires an initial assessment of whether and to what extent property is put to the “exempt use” of industrial processing.
Third, the overall concern of the industrial-processing exemption, MCL 205.94o, is, of course, industrial processing. It is only logical, therefore, to first determine whether “industrial processing” has occurred. Because “industrial processing” is defined by MCL 205.94o(7)(a), the analysis begins there. If “industrial processing” activity is not occurring under either MCL 205.94o(7)(a) or MCL 205.94o(3), the latter of which specifically enumerates certain activities that constitute “industrial processing,” the analysis is complete and the taxpayer is entitled to no exemption. On the other hand, if “industrial processing” activity is occurring, it is then necessary to analyze the remaining provisions of MCL 205.94o, including but not limited to Subsection (2), to determine the measure of the exemption.
B. INDUSTRIAL PROCESSING
The initial consideration is whether altering the voltage of the electricity after it is transmitted by the [40] generation plant satisfies the definition of “industrial processing” under MCL 205.94o(7)(a). Again, this provision states in pertinent part:
“Industrial processing” means the activity of converting or conditioning tangible personal property by changing the form, composition, quality, combination, or character of the property for ultimate sale at retail.... Industrial processing begins when tangible personal property begins movement from raw materials storage to begin industrial processing and ends when finished goods first come to rest in finished goods inventory storage. [MCL 205.94o(7)(a).]
The first inquiry under MCL 205.94o(7)(a) is whether altering the voltage satisfies the first sentence, to wit, whether altering the voltage constitutes “converting or conditioning [electricity] by changing the form, composition, quality, combination, or character. . . for ultimate sale at retail.” Because these words are undefined by statute, it is appropriate to consult a dictionary. Krohn v Home-Owners Ins Co, 490 Mich 145, 156; 802 NW2d 281 (2011) (“We may consult dictionary definitions to give words their common and ordinary meaning.”). “Condition” means “to put in a fit or proper state.” Random House Webster’s College Dictionary (1997). “Quality” means “an essential characteristic, property, or attribute.” Id. “Character” means “the aggregate of features and traits that form the individual nature of a person or thing.” Id.
We conclude that altering the voltage “condition [s]” the electricity “for ultimate sale at retail.” MCL 205.94o(7)(a). The industrial-processing exemption inquires whether tangible personal property constitutes a “finished good.” MCL 205.94o(7)(a). The parties’ various experts agree that the voltage levels at which the electricity is initially generated are not in their final form, such that they would be appropriate for [41] ordinary use by the consumer.5 Thus, altering the voltage “conditions” the electricity for ultimate sale at retail because the electricity is not “finished” and, therefore, not suitable for consumption until that voltage has been lowered.
Furthermore, altering the voltage transforms the “quality” and “character” of the electricity. The parties’ experts agree that the tangible personal property generated by plaintiff—-whether it is characterized as “electricity” or “electric power”—is composed of both voltage and current. Put simply, electricity is measured, at least in part, by voltage. Because electricity is measured in this way, voltage is an essential attribute, and an inherent feature, of electricity. Altering the voltage therefore alters the “quality” and “character” of the electricity. Accordingly, altering the voltage constitutes an industrial-processing activity by satisfying the initial sentence of MCL 205.94o(7)(a).
The next inquiry required under MCL 205.94o(7)(a) is whether the industrial processing of the electricity outside the generation plant satisfies the second sentence, which provides that “[ijndustrial processing begins when tangible personal property begins movement from raw materials storage to begin industrial processing and ends when finished goods first come to rest in finished goods inventory storage.” Defendant does not dispute that industrial processing begins before the electricity has been transmitted from the generation plant. And defendant has identified no point at which the electricity comes to rest in inventory storage. And nowhere does the record otherwise suggest that electricity ever comes to rest in inventory [42] storage. Moreover, electricity is never a “finished good” until the voltage has been reduced to a level approximating 120/240 volts for the typical residential consumer and 480 volts for the typical industrial consumer. We conclude as a result that industrial processing of electricity does not become complete until final distribution to the consumer because there is simply no point within the electric system at which “finished goods first come to rest in finished goods inventory storage” before that point.6
For these reasons, the industrial processing of electricity under MCL 205.94o(7)(a) occurs throughout the electric system from its initial generation until its final distribution to the consumer.7 We therefore affirm the Court of Appeals’ conclusion that the electric system is used for exempt “industrial processing” activity.
C. DISTRIBUTION AND SHIPPING
The second consideration is whether the equipment is somehow excluded from the industrial-processing exemption by MCL 205.94o(6)(b), which reads:
[43] (6) Industrial processing does not include the following activities:
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(b) Sales, distribution, warehousing, shipping, or advertising activities.
“Distribution” describes “an act or instance of distributing,” Random House Webster’s College Dictionary (1997), and “shipping” describes “the act or business of a person or thing that ships goods,” id. The electric system moves electricity from each substation, either to other substations, or to the consumer. This movement, or flow, of electricity constitutes “distribution” and “shipping” of the electricity from the generation plant to the consumer. Thus, the electric system is involved in “distribution” and “shipping” activities, and industrial processing “does not include” these activities. MCL 205.94o(6)(b). Accordingly, from the time when electricity leaves the generation plant until it is finally distributed to the consumer, the electric system is simultaneously involved in “industrial processing activity’ under MCL 205.94o(7)(a) and “distribution” and “shipping” activities under MCL 205.94o(6)(b). We therefore also affirm the Court of Appeals’ conclusion that the electric system is simultaneously used for exempt and nonexempt activities.
Defendant argues that when “an activity is ‘industrial processing’ under [MCL 205.94o(7)(a)], but when a specified ‘exclusion’ applies, it will take the activity outside of the exemption.” That is, defendant argues, distribution and shipping are “specific modifier [s]” to the general definition of industrial processing. See In re Haley, 476 Mich 180, 198; 720 NW2d 246 (2006) (“[I]t is a settled rule of statutory construction that where a statute contains a specific statutory provision [44] and a related, but more general, provision, the specific one controls.”)- See also Ter Beek v City of Wyoming, 495 Mich 1, 22; 846 NW2d 531 (2014) (“It is well accepted that when two legislative enactments seemingly conflict, the specific provision prevails over the more general provision.”). We respectfully disagree with defendant’s analysis.
The “general/specific” rule of statutory interpretation, although a longstanding and honorable interpretative canon, is utterly inapplicable in this case. It is a rule that applies only in circumstances in which some subject in dispute has been removed, or carved out from, a general category of treatment, to which it would otherwise belong, and placed within a more narrow category of treatment to which it belongs by specific definition, to wit, in those circumstances in which the statutory issue is presented in the following form: should the subject in dispute be treated in accordance with the general category to which it belongs or in accordance with the more specific category to which it also belongs? See In re Landaal, 273 Mich 248, 252; 262 NW2d 897 (1935), quoting Crane v Reeder, 22 Mich 322, 334 (1871):
[WJhere there are two acts or provisions, one of which is special and particular, and certainly includes the matter in question, and the other general, which, if standing alone, would include the same matter and thus conflict with the special act or provision, the special must be taken as intended to constitute an exception to the general act or provision .... [Quotation marks omitted.]
That is, the rule only applies when there is some statutory tension or conflict between two possible treatments of a subject, e.g., when an agricultural statute sets different tax rates for “fruits” and “apples.” There is no such conflict or tension here. Rather, there [45] are subjects or activities (“industrial processing”) that fall within the category of “industrial processing,” and there are other subjects or activities (“distribution” and “shipping”) that do not fall within the category of “industrial processing.” These categories are separate and distinct, and there is nothing to suggest that one category can be viewed as being more “general” or “specific” than the other. In short, the nonexempt activities in MCL 205.94o(6)(b) are in no way within the scope of MCL 205.94o(7)(a), and the exempt activity in MCL 205.94o(7)(a) is in no way within the scope of MCL 205.94o(6)(b). Accordingly, there is no hierarchy among tax categories, no conflict or tension as to the treatment of any specific activity, and, for the reasons set forth later in Part III(E) of this opinion, no “all or nothing” conferral of the tax exemption.
D. RULE 65
Defendant also argues that plaintiff is not entitled to the industrial-processing exemption by operation of Mich Admin Code, R 205.115(4)—known as Rule 65(4) of the Specific Sales and Use Tax Rules promulgated by defendant. The rule was enacted under MCL 24.207 of the Administrative Procedures Act8 with the force of law. See Danse Corp v Madison Hts, 466 Mich 175, 181; 644 NW2d 721 (2002) (“In order for an agency regulation ... of general applicability to have the force of law, it must fall under the definition of a properly promulgated rule.”). Rule 65(4) reads as follows:
The sale of tangible personal property consumed or used in the transmission or distribution of electricity, gas, or steam is taxable. Such transmission or distribution starts at the place where the product leaves the immediate premises from which it is manufactured.
[46] Under Rule 65(4), the use tax may be applied to the electric system because the electric system is “tangible personal property . . . used in the transmission or distribution of electricity . . . .”9 Nonetheless, and despite the fact that Rule 65(4) is a “properly promulgated rule,” it does not control the outcome of this case.
“Perhaps the most fundamental aspect of the ‘legislative power’... is the power to tax and to appropriate for specified purposes.” 46th Circuit Trial Court v Crawford Co, 476 Mich 131, 141; 719 NW2d 553 (2006). “[AJgencies cannot exercise legislative power by creating law or changing the laws enacted by the Legislature.” In re Complaint of Rovas Against SBC Mich, 482 Mich 90, 98; 754 NW2d 259 (2008). Therefore, when the Legislature has exempted certain tangible personal property from the use tax by enacting MCL 205.94o, defendant cannot impose the use tax on that property through the rulemaking process. See R C Mahon Co v Dep’t of Revenue, 306 Mich 660, 666; 11 NW2d 280 (1943) (“[L]iability for payment of the sales (and use) tax is controlled by statute. It cannot be imposed by rulings or regulations of the board (department.)”) (citation and quotation marks omitted). As explained in Part III(C) of this opinion, we conclude that plaintiff is entitled to the industrial-processing exemption for the electric system under MCL 205.94o—at least in part—because exempt industrial-processing activity and nonexempt activities [47] are occurring simultaneously. MCL 205.94o(2) contemplates that in such a situation the taxpayer is entitled to some measure of an exemption. Rule 65(4), on the other hand, may be read to provide that the electric system is entirely taxable. Accordingly, Rule 65(4) directly conflicts with MCL 205.94o to the extent that the rule can be read to deprive electric utilities, such as plaintiff, of the entirety of the industrial-processing exemption for tangible personal property located outside the generation plants. Because defendant cannot through the rulemaking process “chang[e] the laws enacted by the Legislature,” In re Complaint of Rovas, 482 Mich at 98, MCL 205.94o is controlling and Rule 65(4) is invalid to the extent it is in conflict with MCL 205.94o. We again affirm the Court of Appeals’ conclusion in this regard.
E. APPORTIONMENT
To reiterate, the electric system is used for tax-exempt activity under MCL 205.94o(7)(a), as well as for nonexempt activities under MCL 205.94o(6)(b). Furthermore, Rule 65(4) does not govern the outcome of this case. The next consideration is whether, and to what extent, the tax on the electric system may be apportioned between exempt and nonexempt activities under MCL 205.94o(2).10
Once again, MCL 205.94o(2) reads:
The property under subsection (1) is exempt only to the extent that the property is used for the exempt purpose [48] stated in this section. The exemption is limited to the percentage of exempt use to total use determined by a reasonable formula or method approved by the department.
The electric system is used for “the exempt purpose stated in this section”—industrial processing—until that point at which the electricity is finally distributed to the consumer. This is because MCL 205.94o(7)(a) provides that “[industrial processing. . . ends when finished goods first come to rest in finished goods inventory storage,” and as already observed, electricity never comes to rest in finished goods inventory storage; rather, it continues to be processed until final delivery is made to the consumer. Industrial processing therefore occurs throughout the electric system11 under MCL 205.94o(7)(a).12 Furthermore, as already explained, nonexempt “distribution” and “shipping” activities under MCL 205.94o(6)(b) also occur throughout the electric system until final delivery is made to the consumer. Accordingly, because the electric system is simultaneously used for both exempt and nonexempt activities, it is necessary to consider MCL 205.94o(2).
MCL 205.94o(2) provides in relevant part that “[t]he property under subsection (1) is exempt only to the extent that the property is used for the exempt purpose stated in this section.” The electric system satisfies MCL 205.94o(l) because plaintiff is an “industrial processor” and, as explained previously, the electric system is used for “industrial processing.” See MCL 205.94o(l)(a) (stating that the tax levied under the UTA does not apply to property sold to “[a]n industrial [49] processor for use or consumption in industrial processing”). Moreover, the only conceivable “exempt purpose” of MCL 205.94o is industrial processing, and as a result, the electric system is exempt from the use tax “only to the extent that [it] is used for” industrial processing.
To identify the extent to which the electric system is used for industrial processing, MCL 205.94o(2) further provides that the exemption “is limited to the percentage of exempt use to total use . . . .” The term “exempt use” refers to use of the property for industrial-processing activity because industrial-processing activity is the only exempt activity identified in MCL 205.94o.13 Therefore, “total use” must refer to the aggregate use of the property for exempt activity and all other activities. That is, “total use” is the sum of the property’s uses for all exempt and nonexempt activities. Whether those two types of activities happen to occur simultaneously is irrelevant to the statutory apportionment scheme. And as a simple matter of mathematics, “total use”—the sum of all uses—must equal 100%. We therefore reverse the Court of Appeals to the extent that it concluded that plaintiff was entitled to the industrial-processing exemption for the entire electric system.14
[50] To determine the “percentage of exempt use to total use,” MCL 205.94o(2), it is necessary to ascertain both the use of the property for exempt activity and the sum of the uses of the property for exempt and nonexempt activities. Then, the “percentage of exempt use to total use” must be determined on the basis of “a reasonable formula or method approved by the department.” MCL 205.94o(2). Once this percentage has been identified, the industrial-processing exemption “is limited to” this percentage. Id,.15
In the case at hand, the record shows that the “exempt use” of the electric system includes, at a [51] minimum, alteration of the voltage under MCL 205.94o(7)(a).16 And “total use” of the electric system is the sum of the uses for such exempt activity plus the nonexempt “distribution” and “shipping” activities under MCL 205.94o(6)(b).
To be clear, we do not purport to recite a formula that applies to this case or any other case. Rather, MCL 205.94o(2) is quite clear that the “reasonable formula or method” must be “approved by the [Department of Treasury].” We simply hold that under MCL 205.94o(2), when property is simultaneously used for both exempt and nonexempt activities, defendant must give some recognition to both exempt and nonexempt activity in calculating “total use” under MCL 205.94o(2). That is, defendant cannot conclude under the statute that the nonexempt activity or activities wholly trump the exempt activity. Conversely, defendant cannot conclude under the statute that the exempt activity wholly trumps the nonexempt activity or activities.
We emphasize defendant’s role in approving “a reasonable formula or method” to determine the “percentage of exempt use to total use” pursuant to MCL 205.94o(2) (emphasis added). The “percentage of exempt use to total use” will in many cases be a highly fact-specific inquiry that depends on a multitude of [52] considerations, and we do not intend to suggest that apportionment under MCL 205.94o(2) can be ascertained and applied without regard to the unique character and extent of the various uses of the property.17
Defendant has contended throughout these proceedings that plaintiff is not entitled to any industrial-processing exemption for the electric system. For the reasons explained herein, we disagree because the electric system is simultaneously used for exempt and nonexempt activities and MCL 205.94o(2) provides that plaintiff is entitled to the industrial-processing exemption on the basis of the “percentage of exempt use to total use” of the electric system. This percentage is to be “determined by a reasonable formula or method approved by the [Department of Treasury].” Because the electric system is used for at least some exempt activity relative to total activity, defendant’s determination that plaintiff is not entitled to any industrial-processing exemption is inconsistent with MCL 205.94o(2). Therefore, we remand to the Court of Claims for defendant to approve a “reasonable formula or method” for determining the “percentage of exempt use to total use” consistent with the principles set forth in this opinion and subject to the initial review of the Court of Claims.18
[53] IV. RESPONSE TO DISSENT
According to the dissent, “[t]he purpose of what DTE claims as industrial processing is . . . simply a means of distributing its product—electric power—most efficiently, not a means of producing a different product.” Post at 61. We respectfully disagree. The electricity is initially generated at about 15,000 to 25,000 volts, so the voltage must necessarily be altered before a useable product has been made available. Therefore, even assuming for the sake of argument that the “purpose,” as opposed to the physical reality, of an activity is determinative with regard to whether a taxpayer is entitled to the industrial-processing exemption, see MCL 205.94o(2), altering the voltage of electricity to render it usable by customers fully serves an industrial-processing purpose.
The dissent concludes that altering the voltage does not constitute “industrial processing” activity under MCL 205.94o(7)(a) because “[t]he fundamental nature of electricity—the flow of electrons—is not fundamentally altered after leaving the production facility.” Post at 62. We disagree because “industrial processing” activity under MCL 205.94o(7)(a) is not limited to those situations in which the “fundamental nature” of the tangible personal property at issue— here, electricity—is “fundamentally altered.” Rather, “industrial processing” activity under MCL 205.94o(7)(a) is defined more broadly to encompass actions that result in “changing the form, composition, quality, combination, or character” of the property. In our view, such changes unquestionably take place in the instant circumstances.
We also believe that the dissent errs by failing to give meaning to the entire definition of “industrial processing,” in particular the language providing that [54] “[industrial processing. . . ends when finished goods first come to rest in finished goods inventory storage.” MCL 205.94o(7)(a) (emphasis added). Even if the dissent is correct that electricity constitutes a “finished good” at the moment it leaves the generation plant— notwithstanding that it is altogether unusable by any actual consumer until final delivery—there is no point at which electricity “first come[s] to rest in finished goods inventory storage.” By concluding that “industrial processing” activity under MCL 205.94o(7)(a) ends when electricity leaves the generation plant, the dissent reads the language “first come[s] to rest in finished goods inventory storage” out of the statute entirely, contrary to all traditional rules of statutory interpretation. See Hannay v Dep’t ofTransp, 497 Mich 45, 57; 860 NW2d 67 (2014) (“[C]ourts must give effect to every word, phrase, and clause in a statute and avoid an interpretation that renders nugatory or sur-plusage any part of a statute.”) (citation and quotation marks omitted).19
Furthermore, we also disagree with the dissent because it fails to take into account that tangible personal property can be simultaneously used for exempt “industrial processing” activity under MCL 205.94o(7)(a) and MCL 205.94o(3) and nonexempt “distribution” and [55] “shipping” activities under MCL 205.94o(6)(b). There is no language in the industrial-processing statute that provides that the use of tangible personal property for one or more nonexempt activities forecloses the simultaneous use of that same property for exempt “industrial processing” activity. Accordingly, the activities enumerated in MCL 205.94o(6)(b) are not “specific modifier [s]” to the “general definition” of industrial processing set forth in MCL 205.94o(7)(a), as defendant suggests. Rather, MCL 205.94o(6) sets forth those activities that do not constitute “industrial processing,” and MCL 205.94o(7)(a) and MCL 205.94o(3) set forth the activity that does constitute “industrial processing.”
V. CONCLUSION
The industrial-processing exemption provides that it is applicable to “the activity of converting or conditioning tangible personal property by changing the form, composition, quality, combination, or character of the property for ultimate sale at retail.... Industrial processing . . . ends when finished goods first come to rest in finished goods inventory storage.” MCL 205.94o(7)(a). Altering the voltage “condition[s]” the electricity by changing its “quality” and “character” “for ultimate sale at retail.” Furthermore, electricity is not a “finished good” until it is set at a usable voltage, and it does not “come to rest in finished goods inventory storage” at any point throughout the electric system. Industrial processing therefore occurs throughout the electric system. Because exempt and nonexempt activities are simultaneously occurring, it is necessary to determine the “percentage of exempt use to total use” by identifying and comparing the use of the property for exempt activity with the use of the property for all activities, both exempt and nonexempt. MCL 205.94o(2).
[56] This percentage must be determined on the basis of a “reasonable formula or method approved by the [Department of Treasury].” Id. The record has not been sufficiently developed in this regard. Therefore, a remand to the trial court is necessary for defendant to approve a “reasonable formula or method” to determine the percentage of plaintiffs exempt use to total use of the electric system and, thus, the industrial-processing exemption to which plaintiff is entitled. The trial court must review this formula or method in light of the statute and enter an order consistent with the reasonable formula or method. Accordingly, we affirm the judgment of the Court of Appeals in part, reverse in part, and remand to the trial court for further proceedings consistent with this opinion.
Young, C.J., and Viviano and Bernstein, JJ., concurred with MARKMAN, J.