Brewer repaid more than $773,000 of taxes to Northern Light Health after a court order.
The city incorrectly taxed two Northern Light Health facilities in Brewer, a Penobscot County judge ruled in January.
Brewer has now repaid the hospital system $773,204 for the past three tax years, City Manager Eric Glidden said. It covers fiscal years 2024 through 2026.
Details of the amount of money that Brewer had to repay Northern Light Health come two months after the judge’s ruling. The payment will not affect the city’s finances or reduce services because the city kept those payments in a separate account in case they needed to be returned, Glidden said.
The city’s tax assessor incorrectly denied exemption for Northern Light Health’s administration building, Cianchette Building at 43 Whiting Road, and two units at the Lafayette Family Cancer Institute at 33 Whiting Road. Those units house Whiting Hill pharmacy, part of M Drug LLC and Quest Diagnostics, a laboratory chain.
“We are glad this is behind us now and we look forward to a mutually beneficial relationship with the City of Brewer going forward,” spokesperson Suzanne Spruce said.
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, a for-profit business.
The issue came down to if a space owned by a nonprofit 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 nonprofit’s purposes, the judge 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.
The buildings retain tax-exempt status because they are solely used for Northern Light Health’s purposes, the judge said.
