As we outlined in February, a total of 14 teams projected to be taxpayers prior to an eventful trade deadline week, with the 16 non-taxpayers on track to receive about $13.8MM apiece in tax distribution money at that point.
However, the Celtics, Nuggets, Suns, Mavericks, Sixers, Magic, and Raptors all ducked below the luxury tax line with their pre-deadline transactions, while a few other teams remained in the tax but took steps to significantly reduce their end-of-season bills.
As a result, seven NBA teams project to finish over the luxury tax line in 2025/26, per ESPN’s Bobby Marks (Twitter link).
Here are those seven clubs, along with their projected tax penalties:
- Cleveland Cavaliers ($68.7MM)
- Golden State Warriors ($67.9MM) *
- New York Knicks ($44.4MM)
- Los Angeles Lakers ($22.2MM) *
- Houston Rockets ($7.2MM)
- Los Angeles Clippers ($6.7MM) *
- Minnesota Timberwolves ($6MM)
Total: $223.1MM
Note: Teams marked with an asterisk are paying repeater tax rates.
While the projected tax payments are quite similar to the ones from a couple months ago, the total is up slightly overall. That’s because the Warriors, Rockets and Timberwolves signed players to fill out the back ends of their rosters. The Lakers will undoubtedly finalize their roster today — they have one standard opening ahead of Sunday’s deadline.
Based on the current figures from Marks, each non-taxpayer is projected to receive a payout of about $4.9MM. That figure is determined by cutting the total league-wide tax penalties in half, then dividing them evenly among the non-taxpaying teams (in this case, 23 clubs). The projected payout was at $4.8MM in February.
In 2024/25, 10 taxpayers paid a total of $461.2MM in penalties and the 20 non-taxpayers reportedly received $11.5MM apiece. This season’s projected distribution payment of $4.9MM is the lowest figure since 2020/21, according to Marks.
It’s worth noting that the tax penalties could still change again before the 2025/26 league year ends. According to Marks (Twitter links), 36 players had a total of 133 different incentives in their contracts entering 2025/26, and 15 of those bonuses are still up in the air entering the final day of the regular season. Some of those bonus situations may not be resolved until the playoffs end.
The Warriors, Lakers, and Clippers would all be subject to repeater penalties in 2026/27 if they’re taxpayers again next season. Additionally, the Bucks, Celtics, Suns, and Nuggets would pay repeater rates if they’re in the tax in ’26/27, since all four clubs were in the tax for three straight years from 2023-25. They’ll each need to spend one more season as a non-taxpayer in order to reset the repeater clock.