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UPMC to city: Go tax our subsidiaries

| Wednesday, April 16, 2014, 4:32 p.m.

The city of Pittsburgh can't challenge UPMC's tax-exempt status because it has no employees, but it can go after taxes from the health care giant's 44 subsidiaries that do, an attorney for UPMC argued on Wednesday in Allegheny County Common Pleas Court.

“In this country, we have corporate separateness,” said Downtown attorney William Pietragallo. “If the city feels that those separate entities should be paying taxes, they can challenge them individually.”

Attorneys for the city argue that UPMC's top officials — including CEO Jeffrey Romoff — work for the conglomerate, so it's unfair for the $10 billion hospital system to claim it has no employees.

“UPMC clearly has some taxable entities, and possibly all of them,” said E.J. Strassburger, an attorney representing the city.

Both sides appeared before Common Pleas Judge R. Stanton Wettick and argued over UPMC's tax liability and whether the judge can make the determination. Wettick made no decision but asked both sides to refile briefs.

Pietragallo said the city's petition could be made only after the city treasurer — using information the office has — decides whether UPMC's subsidiaries should be paying taxes. If the treasurer decides they should, then UPMC can — and likely will — appeal, he said. Until then, he argued, the matter should not be before the court.

“The city of Pittsburgh is not a sovereign who can make all the rules it wants when it suits them,” he said.

UPMC spokesman Paul Wood said 23 of UPMC's 44 subsidiaries are tax-exempt, and their status has never been challenged. The remaining 21 subsidiaries pay taxes, Wood said.

Adam Brandolph is a staff writer for Trib Total Media. He can be reached at 412-391-0927 or abrandolph@tribweb.com.

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