What is NBA luxury tax?

The NBA announced in early August that the 2021-22 season’s salary cap would be $112.414 million, and the luxury tax threshold will be $136.606 million.

What does a luxury tax mean?

A luxury tax is a sales tax or surcharge levied only on certain products or services that are deemed non-essential or accessible only to the super-wealthy. The luxury tax may be charged as a percentage of the purchase price, or as a percentage of the amount above a specified level.

What is the NBA luxury tax 2020?

The salary cap and luxury tax will be set at $109.140 million and $132.627 million, respectively — the same as they were for the 2019-20 season. However, teams’ tax payments will be reduced in proportion to any decreases in Basketball Related Income (BRI). That last part is particularly of interest to the Warriors.

What is a luxury tax in professional sports?

Definition of Luxury Tax (Sports) The main purpose of a “luxury tax” is to level the playing field by taking money from higher revenue teams and giving it to lower revenue teams. For instance, in Major League Baseball, the New York Yankees bring in more than double the revenues that the Pittsburgh Pirates do.

Who does the NBA luxury tax go to?

The first $2,375,400 and 50\% of the remaining total are used to fund player benefits, 25\% goes to the Industry Growth Fund, and the remaining 25\% is used to defray teams’ funding obligations from player benefits.

Can NBA teams go over luxury tax?

Hard salary caps forbid teams from going above the salary cap. Soft salary caps allow teams to go above the salary cap, but will subject such teams to reduced privileges in free agency. Teams that go above the luxury tax cap are subject to the luxury tax (a tax on every dollar spent over the luxury tax cap).

How many NBA teams are in the luxury tax?

The NBA is set to collect more money this season from taxpaying teams than any time before. As of now, there are 10 teams over the luxury tax threshold but three of them – Boston, Portland, and Toronto – are barely above it and can easily get below it before the season ends.

What happens to NBA luxury tax money?

The money generated from the luxury tax is not distributed to the rest of the league, as is the case with the NBA, but rather is used for other purposes.

Who pays the most luxury tax NBA?

The 2021-22 season will have the largest luxury tax payments ever

• Golden State Warriors. 2021-22 Payroll: $177.9 million.
• Brooklyn Nets. 2021-22 Payroll: $175.8 million.
• Los Angeles Clippers. 2021-22 Payroll: $168.8 million.
• Milwaukee Bucks. 2021-22 Payroll: $158.6 million.
• Utah Jazz.
• Los Angeles Lakers.
• Philadelphia 76ers.

Who is luxury tax rapper?

Lawrence Taylor, better known by his stage name Luxury Tax, is a rapper from…