Teams With Tax Concerns At The Trade Deadline

The luxury tax landscape has changed somewhat since the last time I looked at teams that were either in line to pay the tax or in close proximity to the $76.829MM tax threshold. Still, there were 14 teams within $5MM of tax territory at last check in early November, and there are 14 teams in that position now. A dozen of those are the same teams, with the Mavericks and Rockets having replaced the Celtics and Nuggets among them. Two of the teams that were within $5MM of the tax line in November jumped over it amid last month’s flurry of trades, with the Cavs and Thunder joining the ranks of the taxpayers.

There’s a decent chance they won’t be the only teams crossing that line. Four of the five teams closest to the threshold without having gone over have the capability of lengthy playoff runs and figure to be buyers at the deadline if they make moves. The Raptors and Rockets are less than $1MM shy of tax territory, so they’d have to be especially careful if they want to avoid becoming tax teams.

Note that the numbers listed below don’t correspond directly to team salaries. That’s because a team’s payroll is calculated somewhat differently for tax purposes than it is in relation to the salary cap. Players with zero or one year of NBA experience who are on minimum-salary deals count for as much salary as a two-year veteran making the minimum would, as far as the tax is concerned — as long as they aren’t draftees on their rookie contracts. Remember, too, that these figures are subject to change at the end of the regular season if players cash in on bonuses they were considered unlikely to achieve or fail to do so with incentive clauses they were likely to fulfill.

Above the tax line

  • Nets: $91.144MM
  • Knicks: $81.989MM
  • Cavaliers: $81.18MM
  • Clippers: $79.632MM
  • Thunder: $79.098MM

Less than $5MM shy of the tax line

  • Raptors: $76.096MM
  • Rockets: $75.978MM
  • Wizards: $75.829MM
  • Pacers: $75.207MM
  • Grizzlies: $74.649MM
  • Mavericks: $74.516MM
  • Heat: $72.795MM
  • Warriors: $72.541MM
  • Kings: $71.976MM

Note: The final numbers presented here are rounded to the nearest $1K. The Basketball Insiders salary pages were used in the creation of this post.

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