How to Calculate Luxury Tax Bill (i.e. GS 2015-16 Non-Repeater)
Posted: Mon Aug 15, 2016 9:13 pm
Just curious how the league, Eric Pincus, Larry Coon, and Bobby Marks got a $14.8 Million Luxury Tax Bill for the 2015-16 Warriors.
I understand how the tax bill is calculated as Larry Coon describes in
http://www.basketballinsiders.com/chat/nba-chat-with-larry-coon-7282016/
"First, the team salary for tax purposes is adjusted from the actual team salaries. So the amount the use for tax purposes is not exactly the team salary amount — it may be lower or higher.
Second, each $5 million increment is taxed at its own rate. The first $5 million is taxed at $1.50 per dollar, so the team pays a total of $7.5 million for its first $5 million over the tax line. It cam pay a maximum of $8.75 million for its second $5 million over the tax line. So by paying $14.8 million in tax, it means the Warriors paid $7.5 million (in the first band) plus $7.3 million (in the second band). Since the second band is taxed at $1.75 per dollar, that means they were about $4.2 million into the second band, so their team salary for tax purposes was actually $9.2 million over the tax line."
I have the 2015-16 Warriors Team Salary $9,016,211 over the luxury tax line for Tax Purposes NOT the $9.2 million referenced by Larry Coon. Thus, a Tax Bill of only $14,528,369. What am I missing?
https://docs.google.com/spreadsheets/d/1HqlXlwht1rWRFldGSGBYNjL4pdZsVz0gVsKW83d02D4/edit?usp=sharing
I understand how the tax bill is calculated as Larry Coon describes in
http://www.basketballinsiders.com/chat/nba-chat-with-larry-coon-7282016/
"First, the team salary for tax purposes is adjusted from the actual team salaries. So the amount the use for tax purposes is not exactly the team salary amount — it may be lower or higher.
Second, each $5 million increment is taxed at its own rate. The first $5 million is taxed at $1.50 per dollar, so the team pays a total of $7.5 million for its first $5 million over the tax line. It cam pay a maximum of $8.75 million for its second $5 million over the tax line. So by paying $14.8 million in tax, it means the Warriors paid $7.5 million (in the first band) plus $7.3 million (in the second band). Since the second band is taxed at $1.75 per dollar, that means they were about $4.2 million into the second band, so their team salary for tax purposes was actually $9.2 million over the tax line."
I have the 2015-16 Warriors Team Salary $9,016,211 over the luxury tax line for Tax Purposes NOT the $9.2 million referenced by Larry Coon. Thus, a Tax Bill of only $14,528,369. What am I missing?
https://docs.google.com/spreadsheets/d/1HqlXlwht1rWRFldGSGBYNjL4pdZsVz0gVsKW83d02D4/edit?usp=sharing