Luxury Tax Questions

I'm contemplating going over the soft cap and bringing my salaries to about $43million. On average of the 3 checkpoints, however, I should be below the $40million soft cap.

Q1 Is the luxury tax applied on a dollar per dollar basis. ie $3mil over cap, $3mil fee
Q2 When would funds be taken from accounts? End of reg. season/playoffs?

Thanks,
Claudio

 

As long as on average you are below than there is no tax.

A1 Yes it is 100% tax on any overage
A2 Some time in the offseason (how's that for open ended)

 

I think the easiest way to calculate is to take average game expense and multiply by 82. I am not sure if that is what we are doing.

 

That doesn't work as the expenses fluctuates which each transaction you make through out the year.

 

Exactly, that is why the I mentioned average expenses. For Islanders it is $452k per game. The only obstacle is that it includes minor league salaries.

 

Please read the sticky thread labelled 'New HFNHL Financial Structure for 2005-06'. It explains exactly how it is calculated.

Note: The calculations for measurement 1 were done and the details for measurement 2 were also backed up but I haven't finished crunching the numbers.

 

That isn't your average, that is for your last game. Also, it would allow you to duck expensive players in the minors to avoid them counting, and takes into account coach and prospect fees that we do not want.