Cite as: 520 U. S. 564 (1997)
Opinion of the Court
From the State's standpoint it may well be reasonable to use tax exemptions as a means of encouraging nonprofit institutions to favor local citizens, notwithstanding any possible adverse impact on the larger markets in which those in-36, §§ 652(1)(A), (K) (Supp. 1996). While operating as nonprofit entities, their activities are serious business. In Maine Medical Center v. Lucci, 317 A. 2d 1 (1974), the Supreme Judicial Court presumed that a "large hospital" employing 2,000 people qualified as a "benevolent and charitable institution" for purposes of the § 652(1)(A) exemption, and held that a newly constructed $3.3 million parking facility—which patients, visitors, and staff were charged a fee to use—was also exempt from the tax. Though the garage was being operated at an immediate loss, "projected estimates of income and expense indicated a possible recovery of the capital investment over a period of twenty years." Id., at 2. Nonprofit hospitals had national revenues of roughly $305 billion in 1994, considerably more than the $34 billion in revenues collected by hospitals operated on a for-profit basis. U. S. Bureau of the Census, Service Annual Survey: 1994 (1996) (Tables 7.1, 7.3).
Maine law further permits qualifying nonprofits to rent out their property on a commercial basis at market rates in order to support other activities, so long as that use of the property is only incidental to their own purposes. See Maine Medical Center, 317 A. 2d, at 2 (citing with approval Curtis v. Androscoggin Lodge, No. 24, Independent Order of Odd Fellows, 99 Me. 356, 360, 59 A. 518, 520 (1904)); State Young Men's Christian Assn. v. Winthrop, 295 A. 2d 440, 442 (Me. 1972). Although Maine's tax exemption statute was amended in 1953 to specify that the property need not be occupied by the charity to qualify for the exemption, but may also be "used solely" for its own purposes, see ibid., this extension did not alter the "well defined rul[e] of exemption" permitting "occasional or purely incidental" renting. Green Acre Baha'i Institute, 150 Me., at 354, 110 A. 2d, at 584; see also Alpha Rho Zeta of Lambda Chi Alpha, Inc. v. Waterville, 477 A. 2d 1131, 1141 (Me. 1984). But cf. Nature Conservancy of the Pine Tree State, Inc. v. Bristol, 385 A. 2d 39, 43 (Me. 1978) (holding that requirement that property be used "solely" for institution's own purposes prohibits tax exemption where grantor of property to charity maintains private rights of use). Maine's statute expressly contemplates that entities receiving the benefit of the tax exemption may well earn profits, though of course these must be plowed back into the enterprise or otherwise appropriately used. See Me. Rev. Stat. Ann., Tit. 36, § 652(1)(C)(3) (Supp. 1996).
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