Jesse Rogers, ESPN Staff Writer
A record nine MLB teams will exceed the 2024 luxury tax threshold, according to a memo sent to teams and obtained by ESPN on Friday.
As a result, a record $311 million was paid in penalties, led by the Los Angeles Dodgers, who paid $103,016,896. The New York Mets were next at $97,115,609. The Chicago Cubs paid the least in taxes, $570,309.
The other six teams with payrolls subject to the competitive balance tax of more than $237 million were the New York Yankees ($62,512,111), the Philadelphia Phillies ($14,351,954), and the Atlanta Braves ($14,351,954). ($14,026,496), Texas Rangers ($10,807,196), and Houston Astros. ($6,483,041) and the San Francisco Giants ($2,421,788).
TeamCBT Payroll Tax Payment Dodgers $353,015,360 $103,016,896 Mets $347,650,554 $97,115,609 Young Keith s $316,192,828 $62,512,111 Phillies $264,314,134 $14,351,954 Braves $276,144,0 38$14,026,496 Rangers $268,445,491$10,807,106 Astros $264,759,503$6,483,04 1 Giants $249,108,939 $2,421,788 Cubs $239,851,546 $570,309 Total $311,305,310– MLB memo obtained by ESPN
The Dodgers, Mets, Yankees, and Phillies were taxed at a basic tax rate of 50% because they exceeded the tax amount for three or more consecutive years. The Braves and Rangers exceeded the threshold for the second year in a row, earning a 30% tax rate. The Astros, Giants and Cubs were first-time offenders and were subject to a 20% tax on excess fees.
If a team falls below the threshold during a season, its tax rate resets to 20%.
The Dodgers, Mets, and Yankees all exceeded the $237 million threshold by more than $60 million, making them subject to an additional 60% tax, bringing their marginal tax rate up to 110%. The Phillies, Braves, Rangers, and Astros all exceeded the threshold by $20 million to $40 million and were subject to an additional tax of 12.5% on top of their marginal tax rates.
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A team’s CBT figure is determined using the average annual contract value of each player on the 40-man roster and additional player benefits. The final CBT numbers for each team are calculated at the end of each season. The Dodgers’ 2024 CBT salary was $353,015,360, while the Cubs were slightly over the threshold at $239,851,546.
The first $3.5 million in proceeds will be used to fund player benefits. The remaining 50 percent will go to the players’ retirement fund, and the other half will go to the Additional Commissioner’s Discretionary Fund, which will be redistributed to teams receiving revenue sharing.
