The LIV Golf Invitational Bedminster was held July 29-31 at Trump National Golf Club Bedminster. However, the game on the pitch was overshadowed by the curious burial site on the property of former President Donald Trump’s ex-wife, Ivana Trump, who died just weeks before the invitation.
Theories spread quickly social media and news outlets that the location of Ivana Trump’s grave could result in property, income, sales and use, business and inheritance tax exemptions for the company. While the claims of massive tax benefits at face value may appear substantiated by reading the NJ publication ANJ-22, a deeper analysis based on New Jersey law and public information shows that Trump National Golf Club Bedminster currently does not does qualify and not receive the tax benefits of a cemetery business.
If something sounds too good to be true, it probably is.
In general, to qualify for an industry benefit in state and local taxation, most or all of a company’s activities must be related to that industry in order to receive the benefit. An example of this would be the Texas Franchise Tax, which provides for a reduction in the tax rate from 0.75% to 0.375% for companies that are primarily (ie more than 50%) engaged in retail and wholesale trade. And there are many others out there. Although Trump National Golf Club Bedminster now has a burial site on the property, it is still a golf club and not a cemetery society.
To be classified as a cemetery business, a business must be organized as a non-profit corporation to operate a cemetery or be a for-profit corporation providing administrative services to a cemetery. A certificate of eligibility must also be obtained from the New Jersey Cemetery Board.
Lamington Farm Club LLC, doing business as Trump National Golf Club Bedminster, is listed in the New Jersey Division of Revenue and Enterprises database as a limited liability company and not a non-profit corporation. In addition, the Lamington Farm Club does not appear in the IRS’s tax-exempt organization database.
As previously noted, the New Jersey Cemetery Act permits a for-profit corporation, partnership, association, or other private entity that manages or operates a cemetery in the state to have a Power of Attorney issued by the New Jersey Cemetery Board to manage or operate a cemetery continue to manage or operate that cemetery while enjoying the benefits of the New Jersey Cemetery Act. With this in mind, powers of attorney to administer or operate a New Jersey cemetery are public information. Recent searches of the New Jersey Department of Consumer Affairs website do not reveal any certificate owned by Lamington Farm Club or any affiliated entity, including Lamington Farm Golf Club and LFB Acquisition.
Bedminster’s property tax records show that Lamington Farm Club owns four properties at Cowperthwaite and Lamington Road and no ownership of the other units mentioned above. Two of the properties are Class 4A commercial properties and the other two are Class 3B agricultural properties. While there are tax benefits for the two properties classified as 3B, this classification has restrictions that must be met and approved annually by the real estate appraiser. There are no tax records showing that the land on the Bedminster property is related to cemetery use as that property classification is Class 15E.
The New Jersey Cemetery Act of 2003 provides a wide range of tax exemptions for cemetery businesses. These corporations are exempt from sale for collection of judgments, and trust monies and proceeds from cemeteries are exempt from tax and sale or seizure for collection of judgments against the cemetery society.
According to NJ Stat, for a company to enjoy the tax benefits of being classified as a cemetery company, it must meet the following requirements. Section 45:27:
- The company must own, manage, operate or control a cemetery. A cemetery is defined by New Jersey law as land designated for the burial or cremation of human remains.
- A business must be organized as a non-profit corporation to operate a cemetery or be a for-profit corporation providing administrative services to a cemetery. A certificate of eligibility must also be applied for and issued by the New Jersey Cemetery Board.
- A cemetery society is obliged to set up a care and maintenance fund for the long-term care and maintenance of the cemetery.
- Nonprofit organizations must make an initial deposit of $75,000 into the fund, while for-profit organizations are exempt from this requirement.
- Fifteen percent of each grave’s gross selling price must be transferred to the fund, and certain percentages of other gross sales must be transferred to the fund.
- Proceeds from sales must be paid into the fund on a monthly basis.
- Each cemetery society is required to file an annual report with the Cemetery Authority detailing the preservation and preservation fund and how the fund income was used during the year, as well as tax records used to maintain eligibility. A company must provide a survey of the land to be used for cemeteries, which is considered a dedication of the land for cemeteries.
While the decision by members of the Trump family to be buried at Trump National Golf Club Bedminster may be confusing to us outsiders, the research shows that no loophole is being exploited at the time of writing. The land it stands on is not designated for use as a cemetery, and there are no official records of the company being certified to operate as a cemetery company — at least not yet. As a result, Trump National Golf Club Bedminster is subject to taxation without preferential treatment like other golf clubs in New Jersey.
This article does not necessarily represent the opinion of the Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Information about the author
Luke Lucas, Chartered Accountantis Associate Director of State and Local Tax Services in the New York office of Berkowitz Pollack Brant.
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