Dive Brief:
- The city of Pittsburgh has filed a challenge to the University of Pittsburgh Medical Center's tax-exempt status, in a suit challenging UPMC's exemption from city payroll taxes.
- The medical center says that while its 37 independent subsidiaries employ staff, UPMC corporate has zero employees, and that the subsidiaries pay payroll taxes.
- This strategy makes the case much more difficult for the city of Pittsburgh to pursue, as it adds tremendous complexity to the discussion of legal responsibility.
Dive Insight:
Regardless of whether its staffers are employed by UPMC or its subsidiaries, the practical reality is that many thousands of employees work there. From an outside observer's standpoint, it seems downright ludicrous to say that UPMC -- one of the largest medical centers in the U.S. -- has no employees, but it's still possible their gambit will work. If UPMC does succeed in basing its defense on this claim, expect to see other large instituions restructure to protect their tax status.