Dodgers, Mets, Yankees top MLB-record 9 luxury tax offenders - ESPN

A record nine MLB teams were over the luxury tax threshold for 2024, according to a memo sent to teams on Friday and obtained by ESPN.

The result was a record $311 million paid in penalties, led by the Los Angeles Dodgers who are paying $103,016,896. The New York Mets were next at $97,115,609. The Chicago Cubs were taxed the least, paying $570,309.

The Competitive Balance Tax (CBT) is triggered when an MLB team's payroll is higher than $237 million. A record nine teams were hit with the luxury tax in 2024.

The six other teams, along with their penalties, who had Competitive Balance Tax (CBT) payrolls higher than $237 million, which triggers the tax, include the New York Yankees ($62,512,111), the Philadelphia Phillies ($14,351,954), the Atlanta Braves ($14,026,496), the Texas Rangers ($10,807,196), the Houston Astros ($6,483,041) and the San Francisco Giants ($2,421,788).

The Dodgers, Mets, Yankees and Phillies were taxed at a base rate of 50% because they've been over the tax in three or more consecutive years. The Braves and Rangers exceeded the threshold for the second consecutive year, earning a 30% tax rate. The Astros, Giants and Cubs were first time offenders, earning a 20% tax on overages.

If a team dips below the threshold in any one season, its tax rate resets to 20%.

Because the Dodgers, Mets and Yankees were also all $60 million or more over the $237 million threshold, they were taxed an additional 60%, making their marginal rate at the maximum 110%. Meanwhile, the Phillies, Braves, Rangers and Astros were all between $20 million and $40 million over the threshold, triggering an added 12.5% tax to their marginal rate.

A team's CBT figure is determined using the average annual value of each player's contract