NBA salary cap: Difference between revisions

The 2011 CBA instituted major changes to the luxury tax regime. The previous CBA had a dollar-for-dollar tax provision system, which remained in effect through the 2012–13 season. Teams exceeding the tax level were punished by being forced to pay one dollar to the league for each dollar by which their payroll exceeded the tax level. Starting in 2013–14, the tax changed to an incremental system. Under the current system, tax is assessed at different levels based on the amount that a team is over the luxury tax threshold.<ref>{{cite web|url=http://www.cbafaq.com/salarycap.htm#Q21|title=NBA Salary Cap FAQ|website=www.cbafaq.com|access-date=30 March 2018}}</ref> The scheme is not cumulative—each level of tax applies only to amounts over that level's threshold. For example, a team that is $8 million over the tax threshold will pay $1.50 for each of its first $5 million over the tax threshold, and $1.75 per dollar for the remaining $3 million. Starting in 2014–15, "repeat offenders", subject to additional penalties, are defined as teams that paid tax in previous seasons. In the first season, repeat offenders from in all previous three seasons paid a stiffer tax rate; from 2015 to 2016 thereafter, teams paying taxes in three out of four years are subject to the higher repeater rate.<ref name=cbafaq/> As in the previous CBA, the tax revenue is divided among teams with lower payrolls.<ref name="Bresnahan">{{cite news|url=httphttps://articleswww.latimes.com/2011sports/la-xpm-2011-nov/-27/sports/-la-sp-lakers-nba-20111128-story.html |title=New NBA deal may curtail Lakers' free-spending ways |first=Mike |last=Bresnahan |work=[[Los Angeles Times]] |date=November 27, 2011 |access-date=December 12, 2011}}</ref> However, under the new scheme, no more than 50% of the total tax revenue can go exclusively to teams that did not go over the cap.<ref name=coon_11282011/> Initial reports did not specify the use of the remaining 50% under the 2011 CBA,<ref name=coon_11282011/> but it was later confirmed that this amount would be used to fund revenue sharing for the season during which tax was paid.<ref>{{cite news|url=https://www.espn.com/nba/story/_/id/9465225 |title=Lakers to pay hefty luxury tax |first=Marc |last=Stein|work=ESPN |date=July 10, 2013 |access-date=July 11, 2013}}</ref>