Phillies to pay 2023 luxury tax penalty after going over payroll threshold for second year
The Phillies will pay $6.98 million in competitive balance taxes — known more colloquially as “luxury tax” — for 2023.
It’s tax season for Major League Baseball, and the Phillies’ bill is coming due.
The Phillies will pay $6.98 million in competitive balance taxes — known more colloquially as “luxury tax” — for 2023, according to an Associated Press report. They were among eight teams that will pay the surcharge, with the Mets leading the way at nearly $101 million, a record-setting tax bill despite New York’s fourth-place finish.
In going over the payroll threshold ($233 million in 2023) for a second year in a row, the Phillies paid a 30% tax up to $253 million and 42% for overages above that. Their payroll, based on accounting for luxury tax purposes, came in at nearly $255 million, a franchise record.
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The Padres ($39.7 million), Yankees ($32.4 million), Dodgers ($19.4 million), Blue Jays ($5.5 million), Braves ($3.2 million), and Rangers ($1.8 million) also paid the luxury tax, according to the AP. Like the Mets, the Padres and Yankees also missed the postseason, while the Rangers won the World Series.
The payroll threshold will climb to $237 million in 2024. If the Phillies surpass it again, as expected, their tax rate will rise to 50% up to $257 million and 62% on the next $20 million. If they go over $277 million, the tax rate would rocket to 95%.