Can you be buried in a Jewish Cemetery if you have a tattoo? I.e., is it just urban legend that you can't?
In short, the answer is yes. While getting a tattoo is forbidden, once one has one there is no law that he/she cannot be buried in a Jewish cemetery.
However, every Jewish burial society has the right to enact their own rules...
Gesher Hachayim, volume 1, chapter 25, paragraphs 1–2 says:
A renowned [word I don't recognize] who has separated himself from the ways of Jewry and who has removed from himself the entire yoke of the law of the Jews: there's no avelus (mourning) for him... but one must bury him and work toward his burial and with dressing him therefor....
But the townspeople or chevra kadisha (burial society) can prevent the Jewish burial of a renowned sinner as an enactment to 'stop the sinning gap'.
I doubt any chevra kadisha now would refuse to deal with someone for being tattooed. (But see comments on the answer.)
This is a very old (and can also be a very hurtful) Jewish urban legend. See this New York Times article where the author tried to determine the origins of this legend. Why it's gained so much currency in the modern age is beyond me. Frankly the chabad.org article quoted elsewhere, while factually correct, emphasizes the wrong things. The bottom line is that this is an urban legend with no basis in halacha.
The eight rabbinical scholars interviewed for this article, from institutions like the Jewish Theological Seminary and Yeshiva University, said it’s an urban legend, most likely started because a specific cemetery had a policy against tattoos. Jewish parents and grandparents picked up on it and over time, their distaste for tattoos was presented as scriptural doctrine.
People who violate the Torah have the same burial rights as others unless they are continuous violators who have refused to do Teshuva even on their death bed. (Shach YD 345:5 and Shulchan Aruch/Rema 340:5)
So the question may be: Is a person in continuous violation for having a tattoo, or only for putting one on? Also in play, can the tattoo be easily removed? How do we determine teshuva?
Also see: What's the truth about...