Comptroller v. Potomac Edison

Comptroller of Maryland v. The Potomac Edison Company, No. 12, September Term, 2025. Opinion by Gould, J. TAX-GENERAL ARTICLE – TAX EXEMPTION – “TANGIBLE PERSONAL PROPERTY” USED “DIRECTLY AND PREDOMINANTLY” IN A “PRODUCTION ACTIVITY” The Supreme Court of Maryland determined that the equipment that comprises a public utility company’s transmission and distribution system subjects the electricity to a series of actions designed for the specific objective of delivering, over long distances, electricity generated out of State to Maryland customers at a voltage suitable for use. Such equipment is, therefore, used for “processing” and, as such, performs a “production activity” under subsection 11-210(b)(1) of the Tax-General Article. TAX-GENERAL ARTICLE – TAX EXEMPTION – “TANGIBLE PERSONAL PROPERTY” USED “DIRECTLY AND PREDOMINANTLY” IN A “PRODUCTION ACTIVITY” The Supreme Court of Maryland agreed with the Maryland Tax Court that the conductor, substation, and transformer equipment used by a public utility company in the transmission and distribution of electricity was used “directly and predominantly” in “processing” electricity and therefore qualified for an exemption from the sales and use tax. The Supreme Court also agreed with the Tax Court that foundation support structures, such as the clamps, bolts, brackets, and other items, served only to physically support other components and thus did not qualify for the exemption. TAX-GENERAL ARTICLE – LIMITATION OF ACTIONS – REQUEST FOR REFUND OF SALES AND USE TAX PAID The Supreme Court of Maryland found that the four-year limitations period, as provided in subsection 13-1104(g) of the Tax-General Article, is the general limitations period for sales and use tax refund claims. The 30-day limitations period provided in subsection 13- 508(a) is a narrow exception for the specific situation in which a taxpayer pays an assessed tax, in response to a notice of assessment, and seeks a refund of that payment within the 30-day window. TAX-GENERAL ARTICLE – RECOVERABLE INTEREST ON AN OVERPAYMENT The Supreme Court of Maryland analyzed subsection 13-603(a) of the Tax-General Article, which requires the Comptroller to pay interest on an approved refund. Subsection 13-603(b)(2)(i) makes an exception for a refund “based on . . . an error or mistake of the claimant not attributable to the State.” That exception applies only if both conditions are met: the overpayment must be the taxpayer’s mistake, and it must not be attributable to the State. The Supreme Court found that a public utility company that, due to an error, paid sales and use tax on only certain equipment that it contended was exempt from sales and use tax, was nonetheless able to recover interest on those tax payments made, because the State had wrongly determined that the equipment was taxable. Circuit Court for Anne Arundel County Case No.: C-02-CV-22-000534 Argued: October 1, 2025 IN THE SUPREME COURT OF MARYLAND No. 12 September Term, 2025 ______________________________________ COMPTROLLER OF MARYLAND v. THE POTOMAC EDISON COMPANY ______________________________________ Fader, C.J., Watts, Booth, Biran, Gould, Eaves, Killough, JJ. ______________________________________ Opinion by Gould, J. Killough, J., dissents. ______________________________________ Filed: July 17, 2026 Pursuant to the Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. 2026.07.17 '00'04- 08:55:02 Gregory Hilton, Clerk  This case requires us to address three issues concerning the Maryland sales and use tax statute. The first is the exemption in subsection 11-210(b)(1) of the Tax-General Article of the Maryland Annotated Code, MD. CODE ANN., TAX-GEN. (“TG”) § 11-210(b)(1) (2026 Repl. Vol.), which exempts from the tax “tangible personal property” used “directly and predominantly in a production activity[.]” “Production activity” includes the “processing” of “tangible personal property for resale.” Id. § 11-101(f)(1)(i). The Comptroller of Maryland (the “Comptroller”) and The Potomac Edison Company (“Potomac Edison”) dispute whether the equipment used by the latter to transmit and distribute electricity to its Maryland customers is used in a “production activity” and, if so, whether such equipment is used “directly and predominantly” for that purpose. The second issue is the limitations period applicable to refund claims for the sales and use tax. Subsection 13-1104(g) of the Tax-General Article sets a four-year limitations period for those claims; subsection 13-508(a) sets a 30-day limitations period for a narrow subset of claims arising from an assessment by the Comptroller. The parties disagree over which provision applies here. The third issue concerns TG § 13-603, which requires the Comptroller to pay interest on a refund unless the taxpayer’s mistake in making the payment was not attributable to the State. The parties dispute whether that exception applies here. We hold that: (1) certain equipment purchased by Potomac Edison during the relevant time period was used to “process” electricity within the meaning of the “production activity” exemption and that the Tax Court’s finding that such equipment was used “directly and predominantly” for that purpose was supported by substantial evidence; (2) subsection 13-1104(g)’s four-year limitations period—not § 13-508(a)’s 30-day limitations period—governs the timeliness of Potomac Edison’s refund claim; and (3) Potomac Edison is entitled to interest on its refund under § 13-603. Having decided that the four-year limitations period applies to Potomac Edison’s refund claim, we decline to address Potomac Edison’s contentions, raised but not decided in the Appellate Court, that it reached a valid, mutual agreement with the Comptroller to extend their respective limitations periods and that the Comptroller is equitably estopped from asserting otherwise. We therefore affirm in part, reverse in part, and remand to the Appellate Court of Maryland for further proceedings. I A A sales and use tax is imposed on any “retail sale” or “use” of “tangible personal property” in Maryland. TG § 11-102(a). Although some transactions are exempt, the statute presumes that the sales and use tax applies. Id. § 11-103(a). A person seeking to avoid payment of the tax “has the burden of proving that a sale in the State is not subject” to it. Id. § 11-103(b). The exemption at issue here—known as the “production activity” exemption—is set forth in TG § 11-210(b): The sales and use tax does not apply to a sale of: (1) tangible personal property . . . used directly and predominantly in a production activity at any stage of operation on the production activity site from the handling of raw material or components to the movement of the finished product, if the tangible personal property . . . is not installed so that it becomes real property[.] 2 “Production activity” is defined under TG § 11-101(f)(1), in relevant part, as: (i) except for processing food or a beverage by a retail food vendor, assembling, manufacturing, processing, or refining tangible personal property for resale; [or] (ii) generating electricity for sale or for use in another production activity[.] “Tangible personal property,” in turn, is defined to include, among other things, “coal, electricity, oil, nuclear fuel assemblies, steam, and artificial or natural gas.” Id. § 11- 101(k)(2)(iii). B Potomac Edison is a public utility company that sells electricity to Maryland customers. The electricity is generated outside the State and delivered to Potomac Edison’s customers through a transmission and distribution system consisting of conductors, substations, transformers, and related equipment. Electricity is generated at a power plant, where raw material is transformed into electric power through a process known as energy conversion. A coal generator, for example, burns coal and releases energy as heat, which converts water into steam that turns a turbine, resulting in the production of electric power. Electric power is transmitted from the generator to customers through a system of wire conductors. Electric power is comprised of voltage and current: voltage is the pressure or force behind the electrons, and current is the rate at which charge-carrying electrons flow through a conductor. Electric power is measured in watts, voltage is measured in volts, and current is measured in amperes. The electricity generated at a power plant is around 18,000 volts, which is too low to be transmitted efficiently over long distances and too high for retail 3 customers to use. Thus, the voltage of the electricity must be “stepped up” for transmission and later “stepped down” for distribution to customers. The voltage is “stepped up” before it leaves the power plant. Transmitting electricity results in energy loss, known as “line loss”—caused by the generation of heat produced by the movement of electrons along the conductor. To avoid line loss, and thereby preserve the electricity for distribution, Potomac Edison uses “transformers” to raise the voltage of the electricity from 18,000 volts to as high as 500,000 or 765,000 volts. At that point, the high-voltage electricity leaves the power plant and travels along transmission lines to substations containing transformers, switches, controllers, capacitors, and other equipment. At the substations, the voltage is “stepped down” in preparation for regional distribution. “Stepping down” the voltage increases line loss, but it brings the voltage closer to a level usable by Potomac Edison’s customers. The voltage at this stage may be reduced from 500,000 volts to 230,000 volts, then further to 138,000 volts, then to 34,500 volts, and ultimately reduced to lines operating at 12,500 volts. Potomac Edison’s customers have distinct voltage needs that vary with the intended use of the electricity, but, in any case, they require electricity at voltages far lower than the transmission voltage. The electricity then enters the distribution system, where it travels along smaller conductors to last-in-line transformers, typically large metal cylinders mounted on utility poles, near the customer’s premises. At this point, the transformers further reduce the voltage to a level suitable for the customer’s precise needs: 120 or 240 volts in residential settings, and somewhat higher voltages, such as 480 volts, in commercial and industrial settings. Only at that point is the electricity in a form that can be consumed by the end user. 4  C In 2006, Potomac Edison concluded that most of the equipment it had purchased for its transmission and distribution system qualified for the “production activity” exemption, and so informed the Comptroller. In response, the Comptroller initiated an audit to determine Potomac Edison’s liability for sales and use tax for the period of August 1, 2003, through July 31, 2007. Notwithstanding its position, due to an accounting irregularity, Potomac Edison paid sales and use tax on some, but not all, of the equipment purchased for its transmission and distribution system. For easy reference, we will refer to these payments as the “Audit Period Payments.” On April 1, 2011, with the audit nearing completion, Potomac Edison filed a request for a refund of the Audit Period Payments (the “Refund Request”). One week later, the Comptroller completed the audit and issued a notice of assessment for sales and use taxes in the amount of $1,757,862.18, representing the taxes Potomac Edison did not pay during the audit period, plus interest of $1,309,958.90, and a penalty of $175,786.22. Potomac Edison timely petitioned for a redetermination of the assessment (the “Redetermination Request”) and, without waiving its rights, paid the assessment but not the interest or penalty. Thus, Potomac Edison had two separate claims pending with the Comptroller: (1) the Refund Request, seeking a refund of the Audit Period Payments; and (2) the Redetermination Request, challenging the entire audit assessment. As to both claims, Potomac Edison relied on the “production activity” exemption, claiming that the equipment at issue was used, in the words of the statute, “directly and predominantly in a production activity[.]” 5  The Comptroller denied both the Refund Request and the Redetermination Request, concluding that the “production activity” exemption did not apply. Potomac Edison appealed the Comptroller’s final determinations to the Tax Court, which affirmed. Potomac Edison petitioned for judicial review in the Circuit Court for Baltimore City, which affirmed the Tax Court. D Potomac Edison then took its first trip to the Appellate Court of Maryland. In an unreported opinion, the Appellate Court reversed, holding that at least some of the equipment should qualify under the “production activity” exemption of TG § 11-210(b)(1). Potomac Edison Co. v. Comptroller of Treasury, No. 1645, Sept. Term 2016, 2019 WL 1897463, at *1, *9 (Md. Ct. Spec. App. Apr. 29, 2019) (“Potomac Edison I”). The Appellate Court observed that the statute defines “production activity” to include, among other things, “processing, or refining tangible personal property for resale” and that “tangible personal property” is defined to include “electricity” under TG § 11- 101(k)(2)(iii). Id. at *8. The court also determined that “some degree of processing was required between the point at which Potomac Edison received the electricity from the generating plant and the point of delivery to” its Maryland customers. Id. at *9. Thus, the Appellate Court remanded the matter for the Tax Court to determine which equipment would qualify for the exemption under its statutory analysis. Id. at *9-10. E On remand, applying the Appellate Court’s interpretation of the “production activity” exemption, the Tax Court found that Potomac Edison’s conductor, substation, and 6 transformer equipment was used “directly and predominantly” in “processing” electricity and therefore qualified for the exemption. But the Tax Court determined that certain other equipment categorized as “distribution” equipment and foundation support structures, such as clamps, bolts, and brackets, did not qualify for the exemption. Thus, the Tax Court granted in part and denied in part Potomac Edison’s Refund Request and Redetermination Request. The Tax Court also rejected the Comptroller’s argument, raised for the first time on remand, that the bulk of Potomac Edison’s refund claim was untimely under TG § 13- 1104(g)’s four-year limitations period. The Tax Court held that the Comptroller was estopped from asserting a limitations defense based on representations made on the Comptroller’s behalf to Potomac Edison that the extension agreements both parties had signed—which ostensibly extended only the Comptroller’s deadlines—likewise extended the limitations period for Potomac Edison to request a refund. Thus, the Tax Court concluded that Potomac Edison’s Refund Request was timely, and that Potomac Edison was owed interest under TG § 13-603 for the tax payments it made on the exempt equipment. F The Comptroller petitioned for judicial review in the Circuit Court for Anne Arundel County. The circuit court affirmed the Tax Court’s ruling on the applicability of the “production activity” exemption but reversed the Tax Court on its statute of limitations decision. The circuit court held that the Comptroller was not estopped from asserting a limitations defense and that the four-year limitation period under TG § 13-1104(g) applied 7 to the Refund Request, which meant that the Refund Request was timely only as to Audit Period Payments made between April 1, 2007, and July 31, 2007. The circuit court held that the rest of Potomac Edison’s Refund Request was time-barred. G Then it was back to the Appellate Court on Potomac Edison’s appeal and the Comptroller’s cross-appeal. Potomac Edison argued that the circuit court erred in its statute of limitations decision for two reasons: (1) Potomac Edison and the Comptroller contractually agreed to a mutual extension of the parties’ respective limitations periods; and (2) the Comptroller was equitably estopped from relying on TG § 13-1104(g)’s four- year statute of limitations. The Comptroller argued that: (1) the Tax Court erred in determining that the “production activity” exemption applied; (2) the Tax Court’s finding that certain equipment was used “directly and predominantly in a production activity” was not supported by substantial evidence; and (3) Potomac Edison was not entitled to interest on its Refund Request because the Audit Period Payments were due to an accounting irregularity and thus were not attributable to the State. The Appellate Court affirmed the Tax Court’s determination that certain equipment qualified for the “production activity” exemption and that Potomac Edison was entitled to interest on its refund. In re the Comptroller of Maryland, 264 Md. App. 23, 53-54 (2024) (“Potomac Edison II”). In doing so, the Appellate Court applied the law of the case doctrine and declined to revisit its determination, made in Potomac Edison I, that TG § 11-210(b) 8 exempted at least some of the equipment purchased by Potomac Edison for its transmission and distribution system. Id. at 48-49. The Appellate Court also found no need to address Potomac Edison’s statute of limitations arguments, because it instead held that Potomac Edison’s Refund Request was governed by TG § 13-508(a)—not TG § 13-1104(g). Id. at 39-40. Because Potomac Edison filed its Refund Request within 30 days from the notice of assessment, the Appellate Court determined that the entire claim was timely under TG § 13-508(a). Id. at 41. H The Comptroller petitioned this Court for a writ of certiorari, which we granted. Comptroller of Maryland v. The Potomac Edison Co., 490 Md. 279 (2025). The Comptroller presents us with four questions, which we consolidated and rephrased: 1. Did the Tax Court erroneously determine that Potomac Edison’s conductor, substation, and transformer equipment was exempt under TG § 11-210(b)(1)? 2. Did the Appellate Court of Maryland err in holding that Potomac Edison’s Refund Request was governed by the 30-day limitations period under TG § 13- 508(a), instead of the four-year limitations period under TG § 13-1104(g)? 3. Did the Tax Court err in determining that Potomac Edison was entitled to interest on the successful portion of its Refund Request? We answer “no” to the first and third questions and “yes” to the second question. II A When reviewing the decision of an administrative agency, such as the Tax Court, see TG § 3-102, we generally look through the decisions of the circuit court and the intermediate appellate court and evaluate the agency’s decision. Comptroller of Maryland 9 v. FC-GEN Operations Invs. LLC, 482 Md. 343, 359 (2022) (citing Gore Enter. Holdings, Inc. v. Comptroller of Treasury, 437 Md. 492, 503 (2014)). We apply the “substantial evidence” standard to factual findings, asking whether the record contains evidence that reasonably supports the agency’s conclusions. Id. at 359 (citing Frey v. Comptroller of Treasury, 422 Md. 111, 137 (2011)). In doing so, we review the evidentiary record in the light most favorable to the agency and defer to the agency’s credibility determinations and resolution of conflicting evidence. Id. (quoting Ramsey, Scarlett & Co., Inc. v. Comptroller of Treasury, 302 Md. 825, 835 (1985)). An agency’s decisions are also reviewed for legal errors, of which there are at least four categories: “(1) the constitutionality of an agency’s decision; (2) whether the agency had jurisdiction to consider the matter; (3) whether the agency correctly interpreted and applied applicable case law; (4) and whether the agency correctly interpreted an applicable statute or regulation.” Id. at 360. We have often stated that we apply a de novo standard of review to an agency’s legal determinations, and that is certainly true for the first three categories. See id. (quoting Schwartz v. Md. Dep’t of Nat. Res., 385 Md. 534, 554 (2005)). We have, however, occasionally applied some agency deference to the fourth category, specifically when an agency interprets a statute that it administers or a regulation it promulgated under such a statute. Id. at 362 (citation omitted). Just how much deference we give depends on various considerations, which we have described as a “sliding-scale approach[.]” Id. at 363. “We give more weight when the interpretation resulted from a process of reasoned elaboration by the agency, when the agency has applied that interpretation consistently over time, or when the interpretation is the product of contested 10 adversarial proceedings or formal rule making.” Id. at 363 (citation modified). It should be noted that in the context of interpreting tax laws, the agency to which deference may be owed is the Comptroller, not the Tax Court. Id. at 377. Here, the Comptroller did not contend, let alone demonstrate, that the conditions warranting agency deference are satisfied. Thus, we will not give deference to the legal reasoning the Comptroller applied in rejecting the Refund Request and Redetermination Request. B The threshold question here is whether Potomac Edison’s conductor, substation, and transformer equipment is “used directly and predominantly in a production activity” under TG § 11-210(b)(1). That question has two parts. The first is one of statutory construction: whether the “stepping up” and “stepping down” of the voltage between the manufacturing facility and the end user constitutes “processing . . . tangible personal property for resale” under TG § 11-101(f)(1)(i).1 And if the answer to that question is yes, then the second issue 1 Even though the Comptroller did not petition for a writ of certiorari to review Potomac Edison I, we are not precluded at this juncture from revisiting that decision. Loveday v. State, 296 Md. 226, 233-34 (1983); In re Levon A., 361 Md. 626, 636 (2000) (“Our right to review the judgment of the intermediate appellate court exists whether the issue raised in the second appeal was the same as or different from that raised in the first appeal.”). In its petition for writ of certiorari, the Comptroller asked us to review the Appellate Court’s decision in Potomac Edison I in the first two of the four questions it presented, which we granted: 1. Did the Appellate Court erroneously interpret Tax-General § 11- 210(b), which exempts from sales-and-use tax “tangible personal property . . . used directly and predominantly in a production activity,” to apply to the equipment that Potomac Edison uses not to produce electricity but to transmit and deliver it from out-of-state generators to its Maryland consumers? 11 is whether the Tax Court’s finding that such equipment was used “directly and predominantly” in that activity is supported by substantial evidence. We take each question in turn. 1 The goal of statutory interpretation is to discern and effectuate the General Assembly’s intent. Westminster Mgmt., LLC v. Smith, 486 Md. 616, 644 (2024) (quoting Blue v. Prince George’s County, 434 Md. 681, 689 (2013)). Our review begins with the statute’s text, which we view in the context of the overall statutory scheme. Id. (quoting Nationstar Mortg. LLC v. Kemp, 476 Md. 149, 169 (2021)). We “take the language as we find it, neither adding to nor deleting from it; we avoid forced or subtle interpretations; and 2. In applying the Appellate Court’s erroneous interpretation of Tax- General § 11-210(b), did the Tax Court err in concluding that much of Potomac Edison’s transmission and delivery equipment was used “directly and predominantly”—that is, more than 50 percent—in a production activity, when Potomac Edison’s expert testified that the equipment is used both to deliver and process electricity simultaneously and concurrently and that neither delivery nor processing predominates? 3. Did the Appellate Court err in concluding that Tax-General § 13- 508(a), which governs the time within which a taxpayer may seek a refund of tax paid pursuant to an assessment by the Comptroller, supersedes the generally-applicable four-year limitations period in Tax-General § 13- 1104(g) and allows Potomac Edison to seek a refund of previously-paid sales-and-use tax that was not paid pursuant to an assessment by the Comptroller? 4. Did the Appellate Court err by compelling the State to pay interest on Potomac Edison’s refund claim when the evidence showed that Potomac Edison paid the tax because of an “accounting system irregularity,” a mistake not attributable to the State? 12 we avoid constructions that would negate portions of the language or render them meaningless.” Id. (citation modified). We often refer to contemporaneous dictionary definitions to ascertain the “ordinary and popular” meaning of undefined terms used in the statute. Id. (quoting FC-GEN Operations, 482 Md. at 390). And we try to reconcile and harmonize the various provisions of a statutory scheme consistent with their “object and scope.” Id. at 645 (quoting Wheeling v. Selene Fin. LP, 473 Md. 356, 377 (2021)). If the statute is unambiguous, we may consult legislative history to confirm our interpretation. Blackstone v. Sharma, 461 Md. 87, 113-14 (2018) (quoting State v. Roshchin, 446 Md. 128, 140 (2016)). Tax exemptions are strictly construed against the taxpayer. Broadway Servs., Inc. v. Comptroller, 478 Md. 200, 215 (2022) (quoting Supervisor of Assessments of Balt. Cnty. v. Treasurer of Bosley Methodist Church Graveyard, 293 Md. 208, 212 (1982)). That rule of construction, however, does not permit “strained or unreasonable” interpretations or interpretations that are at odds with the purpose of the exemption that, here, was to “encourage the location, development and growth of industry in Maryland.” Comptroller of Treasury v. Disclosure, Inc., 340 Md. 675, 683 (1995) (citation modified). With these principles in mind, we turn to the relevant statutory text. To recap: A sale of “tangible personal property” is exempt from the sales and use tax if such property is used “directly and predominantly in a production activity.” TG § 11-210(b)(1). A “production activity” is defined as, among other things, (1) the “processing [of] tangible personal property for resale[,]” id. § 11-101(f)(1)(i), and (2) “generating electricity for sale or for use in another production activity[,]” id. § 11-101(f)(1)(ii). “Tangible personal 13 property,” in turn, includes electricity. Id. § 11-101(k)(2)(iii). The “for resale” element in § 11-101(f)(1)(i) is not at issue.2 So, Potomac Edison’s purchases of conductor, substation, and transformer equipment are exempt if the equipment is “directly and predominantly” used in the “processing” of electricity. The statute does not define the word “processing,” so we turn to its dictionary definition. Webster’s New World Dictionary of the American Language defined “process,” in relevant part, as “a series of actions or operations conducing to an end.” Process, WEBSTER’S SEVENTH NEW COLLEGIATE DICTIONARY 678 (1963). Similarly, The Random House Dictionary of the English Language defined “process,” in relevant part, as: “1. a systematic series of actions directed to some end. 2. a specific, continuous action, operation, or series of changes.” Process, THE RANDOM HOUSE DICTIONARY OF THE ENGLISH LANGUAGE, COLLEGE EDITION 1055 (1968).3 Although the ordinary meaning of “process” can encompass a broad range of activities, that does not render the definition of “production activity” ambiguous. FC-GEN 2 In Potomac Edison I, the Appellate Court stated that Potomac Edison “does not own the power plant at which the electricity it supplies is generated, and that generating station is not located in Maryland,” Potomac Edison I, 2019 WL 1897463, at *1, and neither party appears to have challenged that premise. 3 In 1968, the Revenue and Taxes Article of the Maryland Annotated Code first codified a reduced rate of two percent for “manufacturing machinery and equipment,” MD. CODE ANN., ART. 81, § 325(g) (1969 Repl. Vol.), which it defined to include “all machinery and equipment . . . which is used in manufacturing, assembling, processing or refining products for sale or in the generation of electricity, or research and development.” Id. § 372(r). As such, we will consider the dictionary definitions of “process” from 1968. See Lowery v. State, 430 Md. 477, 491 (2013) (stating that courts use a dictionary that is “contemporaneous with the drafting and enacting of the language in the statute”). 14 Operations, 482 Md. at 392 (observing that the statutory provision at issue is both broad and unambiguous). Applying those definitions here, the equipment that comprises Potomac Edison’s transmission and distribution system subjects the electricity to a series of actions designed for the specific objective of delivering, over long distances, electricity generated out of State to Maryland customers at a voltage suitable for their use. Such equipment is, therefore, used for “processing” and, as such, performs a “production activity” under § 11- 210(b)(1). The Comptroller does not contend that the word “processing,” viewed in isolation and given its ordinary meaning, does not embrace the voltage transformation activities performed by Potomac Edison’s transmission and distribution system. Instead, she points to the bigger statutory picture and argues that the General Assembly chose to confine all electricity-related exemptions to subsection TG § 11-101(f)(1)(ii), which exempts equipment used in “generating electricity for sale or for use in another production activity[.]” The Comptroller argues that if TG § 11-101(f)(1)(i) applies to the electric power industry, then, given the breadth of the related and overlapping activities it includes—“assembling, manufacturing, processing, or refining”—that subsection “would entirely swallow the more specific reference to ‘generating electricity’” in subsection (ii), rendering the latter superfluous. The Comptroller leans heavily on legislative history to support her interpretation, so we turn to that history next. In 1968, the General Assembly reduced the tax rate for “manufacturing machinery and equipment,” which was defined to include equipment used in “manufacturing, assembling, processing or refining products for sale or in the generation of electricity, or 15 research and development.” 1968 Md. Laws, ch. 452, codified at MD. CODE ANN., ART. 81 §§ 324(s), 325(g), 372(r), 373(g) (1969 Repl. Vol.). And in 1979, the reduced rate was expanded into a full exemption. See 1979 Md. Laws, ch. 216. The Comptroller asserts, and we agree, that the General Assembly’s drafting choices in 1968 are best understood against the backdrop of this Court’s prior caselaw, but we draw different conclusions from that history. The Comptroller points to Frederick Electric Light & Power Co. v. Frederick City, 84 Md. 599, 600 (1897), which involved a Frederick City municipal tax ordinance enacted to encourage industrial development in the city by exempting “machinery and manufacturing apparatus of all manufacturing industries” established within. In rejecting the taxpayer’s claim that its electricity-generating plant was exempt, this Court found it unnecessary “to attempt a scientific discussion of what electricity is” and perceived little value in consulting “encyclopedias, dictionaries or other books endeavoring to define it.” Id. at 600-01. Thus, we declined to decide whether the electric company “can properly be said to ‘manufacture’ electricity or whether it simply brings into action that which is already made[.]” Id. at 601. Instead, we framed the question as what “manufacturing industries” would mean to “the average man” of “fair and ordinary intelligence[.]” Id. Using that approach, we held that the term “manufacturing industries” as used in the ordinance, did not reach electric companies. Id. at 601-08. This analytical approach was not unusual for the time. See, e.g., Ky. Elec. Co. v. Buechel, 143 S.W. 58, 59-61 (Ky. 1912). In subsequent decades, we cited Frederick Electric Light & Power for the proposition that an electric company was not a manufacturer. See, e.g., American 16 Newspapers, Inc. v. McCardell, 174 Md. 56, 58 (1938); Comptroller of Treasury v. Crofton Co., 198 Md. 398, 403 (1951); Suburban Propane Gas Corp. v. Tawes, 205 Md. 83, 92 (1954). Courts from other states debated whether electricity generation constituted manufacturing, with some concluding that it did and others concluding that it did not. See, e.g., City of Ames v. State Tax Comm’n, 71 N.W.2d 15, 22 (Iowa 1955); Buechel, 143 S.W. at 61; Beggs v. Edison Elec. Light & Illuminating Co., 96 Ala. 295, 300 (1892); People ex rel. Brush Elec. Illuminating Co. v. Wemple, 129 N.Y. 543, 553 (1892); Williams v. Park, 56 A. 463, 465 (N.H. 1903); Commonwealth v. N. Elec. Light & Power Co., 22 A. 839, 841 (Pa. 1891). The General Assembly is presumed to have known about this Court’s holdings when it drafted the 1968 statute. See Comptroller v. Badlia Bros., LLC, 490 Md. 163, 170 (2025) (citing Consol. Constr. Servs., Inc. v. Simpson, 372 Md. 434, 461 (2002)). The General Assembly knew in 1968 that, in holding that the “manufacturing” exemption did not apply, this Court in Frederick Electric Light & Power had intentionally not decided whether generating electricity is, in some scientific or technical sense, “manufacturing.” Thus, the General Assembly’s carve-out for “the generation of electricity” in the 1968 enactment is best understood as responding to that holding and clarifying that, regardless of how people understood the science of electricity and the meaning of “manufacturing,” the reduced tax would apply to electricity generation. That drafting choice, however, did not affect the meaning of “processing,” let alone narrow its meaning. In fact, unlike the uncertainty reflected in cases addressing whether electricity generation constitutes “manufacturing,” there does not appear to have been a 17 similar uncertainty about whether transmission and distribution of electricity constituted “processing.” And the closest Maryland case on point—Suburban Propane—decided fourteen years before the 1968 enactment, indicates that this Court perceived a relevant distinction between “manufacturing” and “processing.” 205 Md. at 88-90. In Suburban Propane, this Court considered a propane distributor’s claim under Article 81, § 370(f) of the 1951 Maryland Code, which exempted a manufacturer’s or compounder’s “tangible personal property” not “readily obtainable in Maryland,” but only if the manufacturer also “process[ed]” the product being manufactured or compounded. Id. at 85. The taxpayer purchased the liquid propane, stored it, sometimes added various chemicals for safety and transportation purposes, and then delivered it to Maryland customers in tanks and bottles. Id. at 86-87. Thereafter, valves and regulators on those tanks and bottles reduced the pressure to convert the liquid propane into a gaseous form for use. Id. The equipment for which the taxpayer sought the exemption was “not readily obtainable in Maryland.” Id. at 86. Nonetheless, we rejected the taxpayer’s claim for an exemption because it had not shown that it was engaged in “manufacturing” or “compounding” within the meaning of § 370(f). Id. at 93-94. We reasoned that adding odorant and antifreeze to liquid propane was not “compounding” because it did not change the propane’s BTU content, and reducing the pressure on liquid propane to convert it into a gaseous form for the consumer was not “manufacturing.” Id. at 87-89. Because the taxpayer in Suburban Propane could not surmount the threshold requirement that it be a manufacturer or compounder, we did not need to address whether the taxpayer engaged in “processing” liquid gas to bring it to the customer in a usable form. 18 Id. at 93-94. But we nevertheless observed that the Supreme Court of Alabama had determined, in State v. Alabama Gas Cor