A question for the Pacer Board Brain trust.

basketballwacko2 · Post #1 » by **basketballwacko2** » Mon Mar 12, 2012 5:32 am

Yeah that means you Scoot. 8-)

If a team lets say the Celtics are over the Luxury Tax on March 14th but make a trade and get under the tax level do they pay tax based on the salary they paid for the year, with a prorata thru the 14th of March? Or is the tax computed on their year end salary level?

Example the Celtics trade Rondo and Willcox to the Pacers for Collison, Hansbrough and a #1 pick. That saves the Celtics that is a savings of $9.4 million to the Celtics, which is prorated by the number of games remaining. But what about the Luxury Tax?

I was under the impression that this wouild save the Celtics from paying Luxury Tax.

basketballwacko2 · Post #2 » by **basketballwacko2** » Mon Mar 12, 2012 4:42 pm

Ok if anyone knows and can provide me a link to support it I'd appreciate it.

Post #3 » by **Scoot McGroot** » Mon Mar 12, 2012 5:12 pm

Historically, it's been their total cap number as of the end of the season. Thus, in your case, as Boston is currently $8.9 million over the luxury tax, and they dump $9.4 million in your example in contracts, I am under the belief that they would then be under the luxury tax for the year. They would pay out in cash flow the pro rata of salary for each player they traded and received, but their tax liability would be calculated simply by the cap number of the players on their roster at the end of the year.

I'm not 100% sure this remains the same under the new CBA, though. I have no link either way. I remember reading about this about 2 years ago on the CBA forum here on RealGM though, but can't find the thread now.

Post #4 » by **Gremz** » Tue Mar 13, 2012 1:26 am

I found these tidbits:

viewtopic.php?f=4&t=766376

viewtopic.php?f=4&t=814478

Not completely in depth though.

basketballwacko2 · Post #5 » by **basketballwacko2** » Tue Mar 13, 2012 5:37 am

Thanks guys, I had a guy on the trade forum trying to say that the Lux Tax was prorated, I have always been under the impression that it was based on the salary level at the end of the season.