Author Topic: The Luxury Tax --- Effective Season 11  (Read 45 times)

Talon

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The Luxury Tax --- Effective Season 11
« on: July 11, 2018, 12:05:44 AM »
What is the Luxury Tax?
The Luxury Tax is a system for competitive balance assurance, used as a way to insure teams do not abuse the rules that allow other teams to pay the salary of a traded player.  The Luxury Tax penalizes an organization for exceeding the current Salary Cap with subsidized funds from other teams by charging the violating team(s) a percentage of their excess spending from their PR fund.


How does the Luxury Tax Work?
The Luxury Tax will be collected/paid immediately after teams lock in for the start of the next Season. Your team sheet will reflect your luxury Tax payment which will be non-refundable.   However, your luxury tax will be paid from the season prior.

Quote from: EXAMPLE
The Charlotte Crowns end Season 10 with $12MM in extra salary (via trades covering salary), After the Impact Bowl that figure is locked prior to the start of the next off-season (the time where the money paid by other teams comes off of the books).  This means that in Season 11, Charlotte will pay a tax based on the $12MM they subsidized last season.

The luxury Tax will have various levels. 

A first year offending team will be charged 20% of their subsidized salary from their PR fund.

A team that has exceeded the salary cap two-seasons in a row will pay 35% of their subsidized salary from their PR fund.

and a team that exceeds the salary cap for three or more seasons will pay 50% of their subsidized salary from their PR fund.

If a team does not have the PR in their budget to pay this tax, it will be treated as a PR cap violation which will come with the same punishment and penalties as prior PR violations. (a $5MM fine for the current season and the next, and loss of a draft pick).


Who does the Luxury Tax Apply To?
Any team that has a credit to their salary cap via trade.   If a team has balanced their books by subsidizing salary to a team and having salary subsidized by another team, then the difference is what will be taxed.
« Last Edit: July 11, 2018, 12:18:46 AM by Talon »
Quote
GM Kirk [21|May 12:29 AM]:   When trade fever hits, math is the first casualty.

Talon

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Re: The Luxury Tax --- Effective Season 11
« Reply #1 on: July 11, 2018, 12:19:41 AM »
Please familiarize yourself with this new rule addition.
Quote
GM Kirk [21|May 12:29 AM]:   When trade fever hits, math is the first casualty.

Talon

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Re: The Luxury Tax --- Effective Season 11
« Reply #2 on: July 13, 2018, 12:26:39 PM »
PAYING THE LUXURY TAX

You may pay your luxury tax bill early via Off-season PR if you have the funds, or it will be taxed from your next-season PR fund at the start of the season.
Quote
GM Kirk [21|May 12:29 AM]:   When trade fever hits, math is the first casualty.