UPMC a conglomerate with no employees, attorney argues in Pittsburgh tax case

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Does UPMC have employees?

During a hearing in the city of Pittsburgh's lawsuit against the medical conglomerate, a UPMC attorney answered an unequivocal no, saying the thousands of doctors, nurses and other staff who work under the UPMC banner in fact are employed by separate subsidiaries. With no employees, the city can't challenge UPMC's exemption to the wage tax, attorney William Pietragallo argued.

The city is suing UPMC, seeking to have its public charity status -- which affords it exemption from property and wage taxes -- lifted. But UPMC's argument that it has no employees and, therefore, no obligation to pay wage taxes, puts a kink in the city's case, which does not address the question about whether the medical conglomerate technically employs anyone.

Mr. Pietragallo, who represents UPMC, said the hospital giant's numerous subsidiaries, such as UPMC Mercy, UPMC Presbyterian and Western Psychiatric Institute and Clinic, all are considered nonprofits and file tax returns separately.

"Every entity who has employees with the city of Pittsburgh has filed a return in compliance" with local tax laws, he said.

But Ronald Barber, an attorney for the city, said he could produce tax documents showing that UPMC does in fact employ people.

Today's hearing before Common Pleas Judge R. Stanton Wettick, the first since the case was moved back to state court, ended quickly, as the judge asked the city to file an amended complaint addressing the issue.

"As of now, I'm going to need an amended complaint," the judge said. "Because if UPMC has no employees, there's nothing more I can do."

Moriah Balingit: mbalingit@post-gazette.com or 412-263-2533. Twitter: @moriahbee. First Published October 21, 2013 2:29 PM

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