[¶ 1.] Northern Border Pipeline Company operates an interstate pipeline business that provides transportation services to natural gas owners who desire to ship their gas. The South Dakota Department of Revenue (Department) assessed Northern Border for use tax on the value of the shippers’ gas that the shippers allowed Northern Border to burn as fuel in com-' pressors that moved the gas through the pipeline. The assessment was affirmed following an administrative hearing, but the circuit court reversed, holding that a tax exemption applied. The Department appeals, arguing that the exemption did not apply. By notice of review, Northern Border raises a number of additional issues, including the contention that the burning of the shippers’ gas was not a taxable “use” by Northern Border. We conclude that there was no taxable “use” by Northern Border because the gas was owned by the shippers.
Facts and Procedural History
[¶ 2.] Northern Border operates an interstate natural gas pipeline that extends from Monchy, Saskatchewan, through South Dakota, to North Hayden, Indiana. The Federal Energy Regulatory Commission (FERC) regulates interstate pipeline businesses. Under the federal regulatory scheme, Northern Border is a “transportation-only” pipeline, meaning that it cannot own the gas it transports in the pipeline. See infra ¶ 14. Northern Border is also bound by the terms of its FERC tariff. The tariff identifies the transportation services that Northern Border can offer and the rules under which it provides those services to shippers, the owners of the gas.
[¶ 3.] Northern Border is authorized to provide different kinds of transportation services. For each type of service, the shipper designates the quantity of gas it desires to be transported through the pipeline. The gas is then delivered to Northern Border at a receipt point and returned to the shipper at a delivery point. No gas enters the pipeline in South Dakota.
[¶ 4.] Pressure is required to move the gas through the pipeline. To maintain pressure, gas is continuously routed through compressors located at stations *582along the pipeline. At each compressor station, the gas is compressed and then returned to the pipeline. There are three compressor stations in South Dakota.
[¶ 5.] Although nearly all of the gas routed through the compressors returns to the pipeline, some of the shippers’ gas is burned as fuel to operate the compressors. The gas burned to fuel the compressors is part of what is known as “company use gas.”1 Northern Border does not buy company use gas from shippers. Pursuant to the tariff, shippers must allow their gas to be burned as a condition of receiving Northern Border’s pipeline transportation services. However, shippers retain title to the gas throughout the transportation process.
[¶ 6.] The Department audited Northern Border’s business activities for the period from July 2007 through December 2010. The Department issued a certificate of assessment for use tax on the value of the shippers’ gas that was burned in the compressors.2 Northern Bordercontested the assessment and requested an administrative hearing. Following a hearing, an administrative law judge issued a proposed decision affirming the assessment. The proposed decision was adopted by the Department Secretary, and Northern Border appealed to the circuit court. The circuit court reversed the assessment. The court ruled that Northern Border’s burning of the shippers’ gas was exempt from use tax under SDCL 10-46-55, which exempts “[t]he provision of natural gas transportation services by a pipeline.”
[¶ 7.] The Department appeals the circuit court’s exemption ruling. By notice of review, Northern Border challenges the tax, raising the following four issues:3
Whether Northern Border’s burning of the shippers’ gas was subject to use tax under SDCL 10-46-2.
Whether the imposition of use tax was pre-empted by federal law.
Whether the imposition of use tax interfered with interstate commerce.
Whether the assessment was erroneous due to factual and legal errors.
Decision
[¶ 8.] The Department argues that the circuit court erred in holding that the pipeline-transportation-services exemption applied to the burning of shippers’ gas. “To be exempt, the activity must first be taxable.” Magellan Pipeline Co., LP v. S.D. Dep’t of Revenue & Regulation, 2013 S.D. 68, ¶ 36, 837 N.W.2d 402, 411, reh’g denied (Oct. 22, 2013) (Konenkamp, J., dissenting). See also N. Border Pipeline Co. v. Comm’r of Revenue, Nos. A08-0309, A08-0310, 2009 WL 173959, at *4 (Minn.Ct.App. Jan. 27, 2009) (concluding in a similar pipeline-compressor-gas case that “a court naturally determines whether the use tax applies before it determines whether an exemption applies. A thing can be exempted from a tax only if it is initially among the class of taxable things.”). Therefore, we first consider whether the activity was a taxable event; i.e., whether Northern Border’s burning of the ship*583pers’ gas was subject to use tax under SDCL 10-46-2.4
[¶ 9.] “ ‘Whether a statute imposes a tax under a given factual situation is a question of law reviewed de novo[,] and thus no deference is given to any conclusion reached by the Department of Revenue or the circuit court.’ ” Magellan, 2013 S.D. 68, ¶ 7, 837 N.W.2d at 404 (quoting TRM ATM Corp. v. S.D. Dep’t of Revenue & Regulation, 2010 S.D. 90, ¶ 3, 793 N.W.2d 1, 3). “Statutes [that] impose taxes are to be construed liberally in favor of the taxpayer and strictly against the taxing body.” Butler Mach. Co. v. S.D. Dep’t of Revenue, 2002 S.D. 134, ¶ 6, 653 N.W.2d 757, 759 (quoting Robinson & Muenster Assocs., Inc. v. S.D. Dep’t of Revenue, 1999 S.D. 132, ¶ 7, 601 N.W.2d 610, 612). The Department bears the burden of proving the imposition of a tax. Sioux Valley Hosp. Ass’n v. State, 519 N.W.2d 334, 335 (S.D.1994).
[¶ 10.] SDCL 10-46-2 imposes use tax “on the privilege of the use, storage, and consumption in this state of tangible personal property purchased for use in this state at the same rate of percent of the purchase price of said property as is imposed pursuant to chapter 1CM5.” There are two requirements for taxability under this statute. First, there must be “use, storage, and consumption in this state of tangible personal property[.]” SDCL 10-46-2. Second, the tangible personal property must be “purchased for use in this state[.]” Id.
[¶ 11.] In this case, we may assume without deciding that the Department proved taxability under the first requirement. There is no dispute that natural gas was “tangible personal property,” see SDCL 10-46-1(16),5 and the gas was “consumed” in Northern Border’s compressors.6 The dispositive question is whether the Department also proved taxability under the second requirement.
[¶ 12.] Under the second requirement, the tangible personal property must be “purchased for use in this state[.]” SDCL 10-46-2 (emphasis added). In this case, Northern Border must be deemed to have “purchased” the gas.7 A purchase in-*584cludés “any transfer, exchange, or barter, conditional or otherwise, in any manner or by any means whatsoever, for a consideration.” SDCL 10-46-1(9). Here, the tariff required shippers to allow their gas to be burned in exchange for Northern Border’s transportation service. Thus, there was an exchange of power over the gas for consideration.
[¶ 13.] The Department also argues that Northern Border’s burning of compressor gas was a “use” within the meaning of the second requirement because Northern Border “consumed” the gas to operate the compressors.8 But unlike the first requirement that specifically triggers tax liability for “consumption,” there is no “consumption” language in the second requirement of SDCL 10-46-2. More importantly, the word “use” in the second requirement is specifically defined by statute. A taxable “use” must involve “the exercise of right or power over tangible personal property ... incidental to ownership of that property .... ” SDCL 10-46-1(17) (emphasis added). Therefore, the question is whether Northern Border’s “exercise of right or power over” the gas was “incidental to [Northern Border’s] ownership of that property.” See id. 9
*585[¶ 14.] We conclude that Northern Border did not burn the shippers’ gas incidental to Northern Border’s ownership. This conclusion is compelled under the tariff, federal law, and the evidence. Under the tariff and federal law, Northern Border did not own — indeed, it was prohibited from owning — the gas it burned in the compressors. Instead, the shippers retained title to and ownership of the gas throughout the entire transportation process. Northern Border retained mere possession and custody. See 15 U.S.C. § 717(a) (2006) (granting FERC regulatory control over interstate, natural gas pipelines); Sebring Util. Comm’n v. FERC, 591 F.2d 1003, 1016 (5th Cir.1979) (mentioning that the interstate pipeline company merely transported gas owned by two shippers); In re ConocoPhillips Co., 138 FERC 61004, 61005, 2012 WL 75373, at *5 (2012) (“Although the specific language of each interstate pipeline’s tariff varies, the Commission has made clear that the shipper of record and the owner of the gas must be one and the same throughout the course of the transportation or the duration of storage on any pipeline.”); Enron Energy Servs., Inc., 85 FERC 61221, 61906, 1998 WL 790795, at *1 (1998) (“[Longstanding Commission policy also requires that the shipper must continue to hold title to the gas throughout the entire course of the transportation of the gas.”); Consol. Gas Transmission Corp., 38 FERC P 61150, 61408, 1987 WL 116152, at *24 (1987) (citing Tex. E. Transmission Corp., 37 FERC P 61260, 61683-85, 1986 WL 215099, at *30-33 (1986)) (“To prevent capacity brokering, [FERC] therefore required that all shippers shall have title to the gas at the time the gas is delivered to the transporter and while it is being transported by the transporter.”). The evidence introduced at the administrative hearing was consistent with these rules. Northern Border presented unre-futed testimony that it did not own the gas burned in the compressors.10
[¶ 15.] Because Northern Border did not own the gas, use tax may not be imposed under this Court’s precedents. In Hallett Constr. Co. v. State ex rel. Gillis, we considered the “incidental to ownership” requirement in the materially identical predecessor to SDCL 10-46-l(17).11 80 S.D. 68, 74, 119 N.W.2d 117, 121 (1963). Considering the “incidental to ownership” language, this Court stated that “the clear wording of the statute [defining ‘use’] limits its scope to a use [of property] incident to ownership[.]” Id. Because we found that the taxpayer in Hallett actually purchased and owned the property used, we held that it was a taxable use. Id.
[¶ 16.] Shortly after Hallett, the Legislature enacted SDCL 10-46-5, a statute that imposed use tax on contractors (and only contractors) for the use of property *586that was not owned by the contractor. See 1966 S.D. Sess. Laws ch. 256.12 In a subsequent case interpreting this new statute, we illustrated the significance of the “incidental to ownership” language. See Friessen Constr. Co. v. Erickson, 90 S.D. 60, 62, 288 N.W.2d 278, 279 (1976). We first noted that SDCL 10-46-5 imposed the tax “whether title to such property be in the contractor or any other person[,]” and therefore, the language of the new statute taxed the use of materials the contractors did not own. Id. We then compared the language of SDCL 10-46-5 with the statutory definition of “use” (at that time SDCL 1(M6-1(2)).13 See id. at 68-65, 238 N.W.2d at 279-80. In comparing the language, we observed that the two statutes conflicted. “[T]here is an irreconcilability between the statutes .... as to whether a contractor may be subject to a use tax on property owned by [another entity].” Id. at 64, 238 N.W.2d at 280 (emphasis added). We noted that if the statutory definition of “use” now found in SDCL 10-46-1(17) applied, it would make the tax impermissible because the contractors did not “use” the property “incidental to ownership.” See id. But we held that the use tax could be imposed — even though the contractors did not own the property — because SDCL 10-46-5 was the latter enactment, see id., and it specifically allowed for the imposition of the contractors use tax “whether the title to such property be in the contractor ... or any other person.” See id. at 63, 238 N.W.2d at 279-80. However, we cautioned that the incidental to ownership requirement of the current, definitional statute still applied to the other sections of the tax law, and it “retain[ed] its validity in any situation not set out in SDCL 10-46-5.” Id. at 65, 238 N.W.2d at 280.
[¶ 17.] Today’s case does not involve the use tax set out in SDCL 10-46-5. Therefore, under SDCL 10-46-1(17), Friessen, and Hallett, Northern Border had to own the gas for use tax to be imposed under SDCL 10-46-2.14 See Friessen, 90 S.D. at 64-65, 238 N.W.2d at 280; Hallett, 80 S.D. at 74, 119 N.W.2d at 121. But Northern Border did not own the gas burned in the compressors. Because any “use” of tangible personal property must, by statutory definition, be incidental to ownership of the property, Northern Border did not “use” the gas within the meaning of the second requirement in SDCL KM6-2.15
*587[¶ 18.] The Department, however, contends that burning shippers’ gas should be taxable under the reasoning utilized in two Minnesota cases, Great Lakes Transmission L.P. v. Commissioner of Revenue, 638 N.W.2d 435 (Minn.2002); and Northern Border Pipeline Co. v. Commissioner of Revenue, 2009 WL 173959 (Minn.Ct.App.2009). The Department’s reliance on those cases is misplaced. In both cases, Minnesota sought to impose a use tax on gas burned in pipeline compressors. In Great Lakes, the Minnesota Supreme Court found there was a taxable use, but the court held that “the use of the natural gas to fuel the compressors [was] exempt from use tax under Minn.Stat. § 297A.25, subd. 9 as a part of industrial production of goods to be sold ultimately at retail.” 638 N.W.2d at 441. Following the Great Lakes decision, the Minnesota legislature amended the statute and “explicitly excluded the transportation of natural gas from [the] industrial production [exemption].” N. Border, 2009 WL 173959, at *2. The Department points out that South Dakota has no industrial-production exemption. Therefore, the Department argues that the Minnesota use tax is substantially similar to South Dakota’s, and use tax should be imposed under the initial Great Lakes reasoning, finding that the burning of compressor gas was a taxable use.
[¶ 19.] However, Minnesota’s statutory scheme is broader. It imposes use tax on the use of property when title or possession is transferred. In contrast, South Dakota’s statutory scheme requires ownership of the property. Compare SDCL 10-46-2 & SDCL 10-46-1(17) with Minn.Stat. § 297A.14, subd. 1 (1994) & Minn. Stat. § 297A.01 and subd. 3 (1994); see also Great Lakes, 638 N.W.2d at 439; N. Border, 2009 WL 173959, at *7-8. As previously noted, this distinction is significant because SDCL 10-46-1(17) has always required ownership as an explicit and essential requirement of imposing use tax under SDCL 10-46-2. See Friessen, 90 S.D. at 64-65, 238 N.W.2d at 280; Hallett, 80 S.D. at 74, 119 N.W.2d at 121. Although other states also utilize the broader Minnesota “ownership or possession” language,16 *588South Dakota has retained its narrower statutory definition requiring ownership. See SDCL 10-46-1(17). Therefore, the Minnesota cases are not useful in the analysis.
[¶ 20.] An Arizona case is more on point. Val-Pak East Valley, Inc. v. Arizona Department of Revenue, 229 Ariz. 164, 272 P.3d 1055 (Ct.App.2012), involved use tax under a statute that required use incidental to ownership. The Arizona Court of Appeals concluded: “Although the use tax statute does not define or describe the meaning of the phrase ‘incidental to owning the property,’ on its face this wording requires the exercise of a right or power that one has to tangible personal property by virtue of owning it.” Val-Pak, 272 P.3d at 1061 (emphasis added). The court further stated that it could not “gloss over the statutory requirement that a taxpayer’s use must be incidental to owning the property.” Id. at 1061-62. The court finally noted that if Arizona’s use-tax statute or the definition of “use” contained language that allowed for the imposition of use tax when a taxpayer had possession, the Department’s “argument would have more force.” Id. at 1062 n. 7.
[¶ 21.] Here, SDCL 10-46-1(17) requires ownership, not mere possession, and Northern Border did not own the gas. We cannot “gloss over the statutory requirement that a taxpayer’s use must be incidental to owning the property.”17 See Val-Pak at 1061-62. We conclude that under the current statutory definition of “use,” Northern Border’s burning of gas owned by others was not taxable under SDCL 10-46-2. In light of this holding, we do not reach the other issues raised by the parties. We affirm the circuit court’s judgment reversing the Department’s assessment.
[¶ 22.] GILBERTSON, Chief Justice, and WILBUR, Justice, concur.
[¶ 23.] SEVERSON and KERN, Justices, dissent.