The LIV Golf Invitational Bedminster took place at Trump National Golf Club Bedminster July 29–31. However, the on-course play was overshadowed by the peculiar burial site on the property of former President Donald Trump’s ex-wife, Ivana Trump, who died just a few weeks prior to the invitational.
Theories quickly spread across social media and news outlets that the location of Ivana Trump’s grave could result in tax exemptions from real property, income, sales and use, business, and inheritance taxes for the entity. While there might appear to be substantiation to the claims of massive tax benefits at face value by reading NJ Publication ANJ-22, a deeper analysis based on New Jersey statute and public information reveals that as of right now, Trump National Golf Club Bedminster does not qualify and is not provided the tax benefits of being a cemetery company.
If something sounds too good to be true, it probably is.
Generally, to qualify for any industry-specific benefit in the state and local tax realm, most or all of a business’s activities need to be related to that industry to obtain the benefit. An example of this would be the Texas Franchise tax, which provides a rate reduction to 0.375% from 0.75% for businesses primarily engaged (i.e., more than 50%) in retail and wholesale trade. And there are many others out there. Although the Trump National Golf Club Bedminster does now have a gravesite located on the property, it is still a golf club and not a cemetery company.
To be classified as a cemetery company, a business must be organized as a nonprofit corporation to operate a cemetery or be a for-profit business that provides management services for a cemetery. It also must obtain a certificate of authority from the New Jersey Cemetery Board.
Lamington Farm Club LLC, which does business as Trump National Golf Club Bedminster, is listed as a limited liability company—not a nonprofit corporation in the New Jersey Division of Revenue and Enterprises database. Additionally, Lamington Farm Club does not appear in the IRS Tax Exempt Organization database.
As mentioned, the New Jersey Cemetery Act does allow a for-profit corporation, partnership, association, or other private entity that manages or operates a cemetery in the state to be issued a certificate of authority to manage or operate a cemetery by the New Jersey Cemetery Board—and be permitted to keep managing or operating that cemetery while reaping the benefits of the New Jersey Cemetery Act. With that said, certificates of authority to manage or operate a cemetery are public information in New Jersey. Current searches on the New Jersey Division of Consumer Affairs website do not yield any certificate belonging to Lamington Farm Club or related entity, including Lamington Farm Golf Club and LFB Acquisition.
Bedminster property tax records show that Lamington Farm Club owns four lots of real estate on Cowperthwaite and Lamington Road and no ownership for the other aforementioned entities. Two of the properties are Class 4A commercial property, and the other two are Class 3B farm property. While there are tax benefits for the two lots that are classified 3B, that classification has qualifications that must be met and approved annually by the property assessor. There are no tax records indicating land on the Bedminster property is related to cemetery use, as that property classification is Class 15E.
The New Jersey Cemetery Act of 2003 does provide a broad range of tax exemptions for cemetery companies. These businesses are exempt from sale for collection of judgments, and cemetery trust funds and income are exempt from tax and sale or seizure for collection of judgments against the cemetery company.
For a business to take advantage of the tax benefits of classification as a cemetery company, it must meet the following qualifications, according to N.J. Stat. Section 45:27:
- The company must own, manage, operate, or control a cemetery. A cemetery is defined by New Jersey statute as land dedicated for burial or cremation of human remains.
- A business will need to be organized as a nonprofit corporation to operate a cemetery or be a for-profit business that provides management services for a cemetery. It also must apply for and be issued a certificate of authority by the New Jersey Cemetery Board.
- A cemetery company is required to create a maintenance and preservation fund for the cemetery’s permanent maintenance and preservation.
- Nonprofits are required to make an initial deposit of $75,000 into the fund, while for-profits are absolved from that requirement.
- Fifteen percent of the gross sales price of each grave must be transferred to the fund, and certain percentages of other gross sales must be transferred into the fund.
- Proceeds from sales are required to be deposited into the fund each month.
- Every cemetery company is required to file an annual report with the cemetery board detailing the maintenance and preservation fund and manner of expenditure of fund income during the year, as well as tax records to maintain eligibility. A company must provide a survey of land to be used for cemetery purposes, which shall constitute dedication of the land for cemetery purposes.
While the decision by members of the Trump family to be laid to rest at Trump National Golf Club Bedminster may be puzzling to those of us on the outside, the research shows there is no loophole being taken advantage of at the time of this writing. The land that it sits on is not dedicated for cemetery use, and there is no official record of the business having a certificate to operate as a cemetery company—not yet, at least. Therefore, Trump National Golf Club Bedminster is subject to tax without preferential treatment like other golf clubs in New Jersey.
This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Luke Lucas, CPA, is an associate director of state and local tax services with Berkowitz Pollack Brant’s New York office.
We’d love to hear your smart, original take: Write for Us