Knicks top list of eight teams that must pay luxury tax

Eight NBA teams were officially notified of their luxury-tax obligations for the 2007-08 season via league memorandum in the early minutes of Wednesday morning, with the New York Knicks again topping the list of taxpayers.

Teams with a payroll above $67.865 million last season are required to pay one tax dollar for every dollar they sit over the threshold. That total, for the Knicks, is nearly $20 million -- $19,723,946 to be exact.

But the Dallas Mavericks, after their midseason acquisition of Jason Kidd, wound up only about $100,000 away from the Knicks in tax terms with a bill of $19,613,295.

The other six taxpayers from last season are the Cleveland Cavaliers ($14,008,561), Denver Nuggets ($13,572,079), Miami Heat ($8,318,879), Boston Celtics ($8,218,368), Los Angeles Lakers ($5,131,757) and Phoenix Suns ($3,867,313).

Each of the eight teams will receive formal invoices by Friday and must remit their tax payments in full to the league office by July 23.

The 22 teams that don't owe any tax, in accordance with the league's collective bargaining agreement, will each receive 1/30th of the $92,454,198 total tax pot. That computes to $3,081,807 per franchise.

The remaining $24.7 million of "undistributed tax funds" and an additional $5.3 million from "league entities," according to an official NBA memo, will be used to fund assistance payments to teams for the 2008-09 season. The league's Revenue Assistance Plan stipulates that $30 million will be distributed to "low-revenue teams."

The good news for the Knicks is that their tax bill is less than half of what it was last summer, when they were forced to pay more than $45 million in luxury tax. They have missed the playoffs for four consecutive seasons and averaged 28 victories in that span, costing Isiah Thomas his dual roles of coach and team president.

The gap between the Knicks and the next closest tax team a year ago -- also Dallas -- was nearly $38 million.

Marc Stein is the senior NBA writer for ESPN.com. To e-mail him, click here.