Two Northern Light Health properties in Brewer are tax exempt and the city must return tax payments, a judge ruled earlier this month.
Penobscot County Superior Court Justice Bruce Mallonee ruled Jan. 8 that two Northern Light facilities in Brewer are tax exempt for 2023. His decision follows a lawsuit from Northern Light against the city of Brewer after the tax assessor determined the facilities are not eligible for tax exemption.
Brewer’s tax assessor denied exemption for Northern Light’s administration building, Cianchette Building at 43 Whiting Road, and two units at the Lafayette Family Cancer Institute at 33 Whiting Road, which house Whiting Hill pharmacy, part of M Drug LLC and Quest Diagnostics, a laboratory chain.
The tax status of the two locations were changed after Northern Light outsourced some services. The change to the Cianchette Building’s status was because the health system outsourced administrative services to Optum.
The ruling does not say how much in taxes will be returned to Northern Light, and it’s unclear if the decision applies to tax years after 2023. Northern Light would not comment on those questions.
Northern Light was assessed $12,233 in taxes for 2023 for the administration building, according to tax commitments. M Drug was assessed just under $355 for the same year.
“The court’s ruling affirms that the city of Brewer’s decision to tax Northern Light Health was contrary to public policy and well-established legal precedent in Maine,” Northern Light spokesperson Suzanne Spruce said. “As a non-profit healthcare system serving much of rural Maine, we look forward to reimbursed funds going toward fulfilling our mission to provide excellent patient care across the communities we serve.”
Brewer is assessing what the ruling means with the city’s legal counsel, City Manager Eric Glidden said. The appeal period for the decision is still open, so it’s too early to comment on potential next steps, he said.
“Ultimately, any decision regarding an appeal rests with the city council, and the council will consider its options carefully before taking formal action,” Glidden said.
The issue came down to if a space owned by a non-profit and once occupied by that company, can keep its tax exempt status if it is now occupied by a for-profit business that is “solely devoted” to the non-profit’s purposes, Mallonee wrote.
The contracts with Optum and Quest specifically prohibit them from providing services to anyone other than Northern Light. There are millions of dollars in savings for Northern Light, the decision said.
Profits from sales at M Drug are reinvested into Northern Light, and any sale of convenience items does not interfere with the tax-exempt status, the opinion said.
The buildings retain tax-exempt status because they are solely used for Northern Light Health’s purposes, the opinion said.
Brewer assessed a tax of $257 to M Drug for 2026 and did not tax Quest, according to tax commitment records.
The administration building was assessed a tax of $9,563 for 2026, the records said.