NBA teams established a new record for luxury tax penalties during the 2021-22 season, as seven clubs paid total tax payments exceeding $481M, blowing away the previous single-year record of approximately $173M. A year later, that record is on track to be shattered once again.
According to Eric Pincus of Sports Business Classroom, the nine teams that are currently over the luxury tax line are on track to pay more than $625M in total tax penalties.
Even after the trade deadline has passed, projected tax bills remain fluid due to possible roster moves, suspensions, incentives, and a handful of other factors. For instance, the Brooklyn Nets‘ projected tax bill increased when they signed Nerlens Noel to a 10-day contract earlier this week, and it’ll climb even further if they bring back Noel on a second 10-day pact or a rest-of-season deal.
Still, the current numbers will likely end up being pretty close to the final numbers, and they’re already pretty staggering. As Pincus outlines, here are the current penalties for this season’s taxpayers:
- Golden State Warriors: $168.9M
- Los Angeles Clippers: $140.3M
- Milwaukee Bucks: $79.5M
- Boston Celtics: $65.3M
- Dallas Mavericks: $56.2M
- Phoenix Suns: $53.4M
- Los Angeles Lakers: $35.9M
- Denver Nuggets: $14.2M
- Brooklyn Nets: $11.8M
As significant as the Warriors’ projected tax bill is, it still falls a little shy of the $170M+ they paid last season en route to a championship. The Clippers’ and Bucks’ penalties will be substantially higher than they were a year ago though, and teams like the Celtics, Mavericks, and Suns will be on the hook for sizable bills after finishing last season out of the tax entirely.
It’s worth noting that the Nets, who paid a bill of nearly $98M in 2022, were headed for a nine-figure penalty this year before February’s Kevin Durant and Kyrie Irving trades, so their new projection looks pretty good by comparison.
According to Pincus, the NBA’s 21 non-taxpayers are presently on track to receive payments worth about $14.9M, since 50% of the penalties in a given league year are redistributed to the teams that finished out of the tax.
The shares for non-taxpayers would have been higher, but the Sixers joined that club by sneaking under the tax line at the trade deadline, while teams that were dangerously close to that threshold—like the Hawks, Trail Blazers, and Heat—created some extra breathing room with their pre-deadline deals.
The luxury tax system is expected to be modified in the NBA’s new Collective Bargaining Agreement, so it will be interesting to see whether the record set this season for total tax payments ends up standing for a while.
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