Distribution of luxury tax and escrow

Post #1 » by **ranger001** » Sun Jun 29, 2008 1:22 pm

According to the salary cap FAQ luxury tax money is distributed to all teams in equal shares whether or not the teams are taxpayers. However the example in Q.17 says a team that crosses the tax forfeits their 2.4million tax distribution. Is that just an old example? I remember a couple years back that teams paying the tax didnt get the distribution or is the 2.4million coming from somewhere else?

Modern_epic · Post #2 » by **Modern_epic** » Sun Jun 29, 2008 3:01 pm

ranger001 wrote:According to the salary cap FAQ luxury tax money is distributed to all teams in equal shares whether or not the teams are taxpayers.

Where do you see that?

FAQ wrote:Tax money:

* Teams under the tax level receive a full share (1/30) of the tax money. (Note that if the league expands, the fraction changes.)

* Some or all of the remaining money may be reserved by the league for "league purposes."

* Any remaining tax money that is distributed to teams must go to all teams in equal shares.

Dunkenstein · Post #3 » by **Dunkenstein** » Mon Jun 30, 2008 5:22 am

Escrow money: Escrow money is distributed to all teams in equal shares.

Luxury tax money: Only teams under the tax threshold receive a full share (1/30) of the tax money.

After the teams under the luxury tax threshold receive their shares, there is still a bunch of money left over. The league can use some or all of that undistributed money for "league purposes", primarily to fund a pool that subsidizes those "small market teams" that are losing money. If the league doesn't appropriate all the undistributed luxury tax money, any money left over is then distributed equally to all 30 teams.

bstein14 · Post #4 » by **bstein14** » Mon Jun 30, 2008 9:58 am

So, do we have numbers for how much each team under the tax will get this year? (1/30)?

And also, do we know for sure, exactly which teams ended up above the luxury tax and by how much? I guess we'd need to know that for #1.

Dunkenstein · Post #5 » by **Dunkenstein** » Mon Jun 30, 2008 5:36 pm

bstein14 wrote:So, do we have numbers for how much each team under the tax will get this year? (1/30)?

And also, do we know for sure, exactly which teams ended up above the luxury tax and by how much? I guess we'd need to know that for #1.

The league usually gives the teams that information just before the end of the moratorium on July 9.