| Taxation of Water District Land
January 21, 2005
As the accompanying newspaper articles indicate, the Water District is going to court over the issue of whether or not it should pay taxes for property it owns in the Town of Sanford. Since 1970, to protect the water quality of Branch Brook, we have purchased a total of 765 acres of land in Sanford. Our tax exempt status was never challenged until the Town of Sanford decided to tax us in 2003.
When the Legislature created the District in 1921, it expressly made all of its property exempt from taxation. Not all non-profit water utilities have as clear an exemption status as we do. A few water utilities in Maine pay some property taxes to towns on land owned outside of their chartered service territories. Their charters were either written prior to 1911 (when a law was passed that limited certain "out of town" exemptions), or their charters did not provide for a blanket exemption from taxation. Our charter (as written in Chapter 159, Private and Special Laws of Maine, 1921) specifically states the following:
(Sec. 12) "The property of said district shall be exempt from taxation."
In our charter's 1957 amendment (Chapter 86, Private and Special Laws of Maine, 1957), it states:
(Sec. 2) "Said district.is hereby authorized to take, hold, divert, use and distribute water.from Branch Brook and the Merriland River and their tributaries from their sources to their mouths." and
"Said district.is hereby authorized to take and hold.real estate.by purchase, lease or otherwise.for preserving the purity of the water and watershed, for protecting the sources of its water supply..."
In summary, the District is of the opinion that it is fully tax-exempt and is not required to pay taxes on watershed land it owns in Sanford.
Here are some recent newspaper articles on this topic:
 Journal
Tribune 12/22/04
 Utility is suing Sanford over tax - Portland Press Herald
York County Coast Star 1/13/05
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