How does NBA luxury tax work?

Last year, the NBA had its highest luxury tax distribution in league history. Seven teams finished over the luxury tax and combined for $481 million in luxury tax payments. The remaining 23 teams who finished below the luxury tax received $10.46 million each from the distribution.
The 2021-22 NBA season was projected to have a record-setting luxury tax season as early as the 2021 offseason. The Golden State Warriors, Brooklyn Nets, Los Angeles Clippers, Milwaukee Bucks, Los Angeles Lakers, Utah Jazz, and Philadelphia 76ers collectively spent $481 million last season, making the distribution nearly three times larger than the previous 2002-03 record season.

Now the 2022-23 season is currently projected to beat last season’s luxury tax distribution by a significant margin. Four more teams are set to join the list with the Boston Celtics, Phoenix Suns, Dallas Mavericks, and Denver Nuggets while the Utah Jazz are set to leave. The 10 teams are currently projected to collectively spend $650 million in luxury tax payments. This would have the remaining 10 non-taxpaying teams collect $16.24 million from the distribution.

The Atlanta Hawks and Portland Trail Blazers are also currently over the luxury tax but they aren’t being counted in this projection. There’s a strong possibility they finish below the luxury tax by the end of the season since they are just slightly over the threshold.

(Credit: HoopsHype)

[balance]

You make this kind of stuff much more fun and interesting than I would I have thought I’d want to learn about it

[Rivs]

This video was very informative and entertaining. Joe Lacob is the perfect owner for the Warriors and perfect owner to be in the NBA in general because he actually cares about winning.

[HokkaidoSan]

Money buys happiness but it doesnt buy good teams. Also there should be exceptions on homegrown players. This luxury tax punishes teams who stick and develop their draft pick throughout the years.

[davidhale]

Came here after I saw the English football Premier League suggest an NBA style system

[Phoenix-pmqr]

Great video!!! I love to need out on this stuff, too

[christianmorales]

It’s okay if you we’re sweaty you finished the video great 👍🏼

[jishnujishnu]

You had a booger in your nose the entire time