2017 Tax Return Shows the Murphys Made Almost $2M More than in Previous Year

John Reitmeyer | November 2, 2018 | More Issues
Governor allowed reporters to review materials for four hours yesterday. He had released two pages from federal tax forms earlier in the week

Credit: Edwin J. Torres/Governor's Office
Gov. Phil Murphy and his wife Tammy Murphy
Gov. Phil Murphy’s tax records show he paid a hefty real-estate tax bill and also took a sizable loss on an investment in a women’s professional soccer team last year but still ended up making nearly $7 million thanks to a wide range of successful foreign and domestic investments.

Murphy and his wife Tammy owned stakes in a plethora of blue-chip stocks like Amazon, Apple and Facebook, according to copies of his 2017 tax returns that reporters were permitted to review for a few hours Thursday. The first-term Democrat was also invested for a time in Celgene, the Summit-based pharmaceutical company once run by Republican Bob Hugin who’s now engaged in a bruising U.S. Senate contest against incumbent Bob Menendez.

The Murphys paid more than $300,000 in property taxes for their home in Middletown, according to the tax records, covering the year before he became governor. That outlay incorporates a prepayment of a portion of this year’s levy in response to federal tax-code changes that were signed into law late last year by President Donald Trump.

Counting properties the couple owns in Italy and Germany, the total amount of real-estate taxes paid last year by the Murphys — both former employees of the Goldman Sachs investment bank — was nearly $324,000, more than the median value of a home in New Jersey.

Limited access to the returns

Murphy chose not to make his full tax returns available online for public review — a practice at odds with his predecessor Chris Christie, who released his full returns during his two terms in office. Instead, Murphy released two pages from his federal tax forms earlier this week and then allowed reporters to review other materials between noon and 4 p.m. yesterday.

Murphy’s office said his returns were not released in full to the public due to their complicated nature and the threat of fraud. In a statement, the governor boasted that he’s gone further than Trump, a Republican who has broken with tradition by refusing to make any of his tax returns available to the public.

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In all, the Murphys made $6.8 million in income in 2017, besting their total from the year before by more than $2 million. Much of their income — about $5.8 million — came from capital gains paid on investments. They also earned another $1 million in dividends.

If the couple earns the same amount of income this year they will be subject to the new, 10.75 percent state income-tax rate that Murphy signed into law earlier this year for all earnings over $5 million.

Huge property taxes

The Murphys also appear to be among those who would take a big loss from the decision by Trump and the Republican Congress to place a $10,000 limit on the federal tax deduction for state and local taxes. Murphy has opposed that policy change and earlier this year enacted a state “workaround” measure that attempts to recapture the full write-off using charitable deductions.

Even after accounting for the prepayment of some of their 2018 property tax bill, the Murphys’ property taxes top $200,000, far above the statewide average of $8,690.

Homes in Italy and Germany

The governor’s 2017 state tax returns indicate the couple took the state’s $10,000 deduction for local property taxes, which was increased to $15,000 this year under another piece of legislation signed into law by Murphy. The couple also donated $1 to the fund that helps provide gubernatorial candidates in New Jersey with some public financing, something they did not do the year before the governor ran for office.

In addition to paying property taxes on the home in Middletown, the tax forms indicate the Murphys also paid more than $13,000 in taxes on a home they own in Umbria, Italy and nearly $4,000 for a property in Berlin, Germany. They also received modest state income-tax credits for payments to four other states — Illinois, Missouri, Nebraska and Virginia — likely due to business interests in those states.

The Murphys also used a New York post-office box address to file their taxes, something that the governor’s office attributed to the location of his accountant.

They took a big loss on stake in soccer team

The tax materials were made available for review this week because the Murphys sought and received an extension that allowed them to file their taxes in mid-October, his office said. As a candidate, Murphy similarly only allowed reporters to review his tax records for a two-hour period.

Last year was the second-best year that the Murphys have had since 2010, according to the tax records. In all, the couple has earned nearly $40 million during that time.

But one area where they took a significant loss was from Murphy’s ownership stake in the Tinton Falls-based Sky Blue FC women’s soccer team. The governor reported a $500,000 loss on his state income-tax returns, and a more than $6 million hit on his federal returns. Murphy, who frequently talks about soccer and sports in general, is reportedly invested in the team even though it loses money to serve as an inspiration to his daughter, Emmanuelle, who is a soccer player.