Five Teams Finish 2018/19 Season In Tax Territory

With the exception of bonuses that could still be earned – or missed – in the postseason, 2018/19 NBA team salaries are now frozen for luxury-tax purposes, ESPN’s Bobby Marks observes. That means that five teams will finish the ’18/19 season as taxpayers.

Here are those five teams, along with approximations of their projected luxury tax bills, per Marks:

  1. Oklahoma City Thunder: $61.6MM
  2. Golden State Warriors: $51.5MM
  3. Toronto Raptors: $21.4MM
  4. Portland Trail Blazers: $15.1MM
  5. Boston Celtics: $3.9MM

While the Warriors‘ payroll is actually slightly higher than Oklahoma City’s, the Thunder met the repeater tax criteria, since they also paid the tax in 2015, 2016, and 2018. As a result, they’re subject to more punitive penalties, as we outline in our glossary entry on the luxury tax. The standard penalties for taxpaying teams start at $1.50 per dollar and increase from there; the repeater penalties start at $2.50 per dollar.

Golden State will meet the repeater criteria next season if they’re in the tax again, since they’ll have paid the tax in 2016, 2018, and 2019. Teams qualify as repeat offenders when they’ve finished in the tax in three of the previous four seasons.

The figures listed above are subject to change. For instance, Kyle Lowry has three separate $500K bonuses that he could still receive, depending on how far the Raptors advance in the playoffs. If he earns any of those, they’d be added to Toronto’s payroll and would in turn increase the club’s tax bill.

Since half of the luxury tax penalty money is reallocated to the teams that finished out of the tax, those non-tax clubs are in line for payouts of approximately $3.1MM, per Marks.

The Heat, Wizards, and Rockets made in-season transactions to get out of tax territory and will now receive $3.1MM from the tax pool. Other clubs, such as the Grizzlies, Knicks, Hornets, Cavaliers, Pistons, and Bucks, managed to keep their team salaries just below the $123.73MM tax threshold throughout the league year.

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7 thoughts on “Five Teams Finish 2018/19 Season In Tax Territory

  1. rxbrgr

    A lot of dead money on the Knicks’ cap sheet. THREE players were waived with $18mm+ salaries!

    • afsooner02

      I’d give them fair odds at that….they swept Portland in reg season and that was with nurkic (sp).

      However it is okc and they can lose to anyone and it’s not shocking

  2. woodstock005

    I am surprised okc spend that much???
    Paul George ???

    Why not okc over paid Kevin Durant???

    Okc to me just average team

    If you good team you need to have at least one area that is very good

    I not see it

  3. Ferris369

    Where does the other half of the luxury tax money go?? That’s a lot of MILLIONS for someone….

    • Luke Adams

      The other half is used for “league purposes,” which is quite vague. Here’s how Larry Coon explains in it in his CBA FAQ:

      “”League purposes” essentially means for any purpose the league decides, including distributing the money back to teams. Currently 50% of the tax revenue is used as a funding source for the revenue sharing program, and the remaining 50% is distributed to non-taxpaying teams in equal shares.”

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