Yankees, Tigers draw luxury tax charges
NEW YORK -- The New York Yankees not only failed to make the playoffs, they were hit with their highest luxury tax in three years.
The Yankees were assessed a $26.9 million tax by the commissioner's office on Monday, up from $23.9 million last year and their biggest bill since paying nearly $34 million for 2005.
The Detroit Tigers, who also failed to qualify for the postseason, are the only other team that must pay tax and owe $1.3 million to the commissioner's office.
Checks are due by Jan. 31.
Both teams got little for what they spent. The Yankees' streak of 13 consecutive playoff appearances ended, and they finished third in the AL East at 89-73, prompting them to spend nearly a quarter-billion dollars to sign pitchers CC Sabathia and A.J. Burnett.
While the Yankees pay at a 40 percent rate for the amount over $155 million, the Tigers pay at a 22.5 percent rate because they exceeded the specified threshold for the first time.
This year's figure brings the Yankees' total tax to $148.5 million in the six seasons since it began -- 90 percent of the total.
New York's payroll was $222.2 million and Detroit was second at $160.8 million for the purpose of the luxury tax. To compute it, Major League Baseball uses the average annual values of contracts for players on 40-man rosters and adds benefits.
The threshold rose from $148 million last year to $155 million this season. It goes up to $162 million next year and rises by $8 million in each of the following two seasons.
Copyright 2008 by The Associated Press
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