Time to pay the Taxman

Champion Red Sox owe nearly $12M in luxury tax

Boston should be happy to pay this tax bill. The World Series champion Red Sox owe $11,951,091 in luxury tax for having baseball’s top payroll, according to final calculations by the commissioner’s office obtained by The Associated Press. The only other team that owes is the Washington Nationals, who must pay $2,386,097, their second straight year with a bill. Because Boston was more than $40 million over the tax threshold, it became the first team to incur a new penalty put in place for the 2018 season: the top Red Sox selection in next June’s amateur draft will be dropped 10 places. Boston’s top pick had been projected to be No. 33 overall before the penalty. Boston has owed tax in the years of three of its four titles this century, paying $3,148,962 in 2004 and $6,064,287 in 2007. The Red Sox stayed under the tax threshold when they won in 2013. The only other championship teams to owe since the tax began in 2003 were the 2009 New York Yankees at $25.7 million and the 2016 Chicago Cubs, at $2.96

million.

This year’s initial tax threshold was $197 million, counting payrolls by average annual values and including earned bonuses, adjustments for cash trans-

actions and option buyouts and just over $14 million per team in benefits. Boston’s payroll for the tax was $239.5 million, exceeding the $237 million threshold that triggered the draft penalty. Washington’s was $205 million.

Boston boosted its payroll during spring training when it added slugger J.D.

Martinez, who counted at $23.75 million on the tax payroll and then earned $700,000 in bonuses while leading the major leagues with 130 RBIs.

Ahead of the July 31 trade deadline, the Red Sox acquired World Series MVP Steve Pearce, who added $3,208,602 to the payroll, including a $50,000 Series MVP bonus; pitcher Nathan Eovaldi, who added $720,430 and became a key component to the title run with a pair of postseason wins and a six-inning relief outing in World Series Game 3 against the Los Angeles Dodgers; and second baseman Ian Kinsler, who added $3,766,666.

DAVID J. PHILLIP - THE ASSOCIATED PRESS File- This Oct. 28, 2018, shows Boston Red Sox owner John Henry, partially hidden at left, and chairman Tom Werner holding the championship trophy beside manager Alex Cora, right, after Game 5of baseball’s World Series against the Los Angeles Dodgers in Los Angeles.