Report: Dodgers owe $26.6 million in luxury taxes.

Move over, Yankees.

The Dodgers will pay more luxury tax on their 2014 payroll than any major league club: $26.6 million, according to the Associated Press.

The Dodgers have had baseball’s highest payroll for more than a year now. Because this is the second straight year in which they have exceeded the luxury tax threshhold, the Dodgers paid a 30 percent tax on every dollar above $189 million. The percentage escalates for each year a team exceeds the luxury tax threshhold, so the Dodgers will pay 40 percent on every dollar above $189 million in 2015.

This year, the Dodgers owe $26,621,125 based on a $277.7 million payroll for purposes of the tax, according to the AP. It’s the first time that any team other than the Yankees will pay the most luxury tax.

A team’s luxury tax is calculated as a percentage of the sum of the average annual value of every major-league contract. For example, the average annual value of Andre Ethier‘s contract is $17 million. His contract calls for him to make $15.5 million this year in actual money. However, for the purposes of calculating luxury tax, MLB counted Ethier’s salary as $17 million.

The Dodgers’ actual 2014 payroll came to $257,283,410 — a major-league record. According to the AP, here is every team’s actual 2014 payroll:

1. Dodgers $257.3
2. Yankees $218.5
3. Phillies $183.5
4. Tigers $173.3
5. Red Sox $168.2
6. Giants $165.1
7. Angels $164.1
8. Rangers $145.7
9. Nationals $141.8
10. Blue Jays $135.4
11. Cardinals $121.0
12. Reds $115.4
13. Braves $114.7
14. Orioles $112.7
15. Brewers $110.3
16. Mariners $109.0
17. Diamondbacks $108.1
18. Rockies $97.8
19. Royals $97.7
20. Cubs $93.2
21. Mets $92.9
22. White Sox $92.5
23. Athletics $91.6
24. Twins $91.1
25. Padres $85.5
26. Indians $83.7
27. Pirates $78.4
28. Rays $77.1
29. Astros $54.7
30. Marlins $52.5

This entry was posted in JP on the Dodgers by J.P. Hoornstra. Bookmark the permalink.

About J.P. Hoornstra

J.P. Hoornstra covers the Dodgers, Angels and Major League Baseball for the Orange County Register, Los Angeles Daily News, Long Beach Press-Telegram, Torrance Daily Breeze, San Gabriel Valley Tribune, Pasadena Star-News, San Bernardino Sun, Inland Valley Daily Bulletin, Whittier Daily News and Redlands Daily Facts. Before taking the beat in 2012, J.P. covered the NHL for four years. UCLA gave him a degree once upon a time; when he graduated on schedule, he missed getting Arnold Schwarzenegger's autograph on his diploma by five months.