Phillies to pay over 6 million in luxury tax for 2023 season

The 2023 competitive balance tax bills are in and the Phillies owe $6.98 million, according to a recent report from the Associated Press.

This is the second year in a row the Phillies have paid the luxury tax, which is formally known as the competitive balance tax. With the first threshold for 2023 set at $233 million, the Phillies, as two-time offenders, were taxed at 30% for the first $20 million in overages and 42% for the next $20 million. While the report did not include the Phillies’ final luxury tax payroll figure for 2023, the number should be just over $255 million based on the $6.98 million owed.

The Phillies were one of eight teams to finish the year above the first threshold. The Mets, after finishing in fourth place in the NL East, owe a record high $101 million in tax penalties for 2023. The Padres ($39.7 million), Yankees ($32.4 million), Dodgers ($19.4 million), Blue Jays ($5.5 million), Braves ($3.2 million) and Rangers ($1.8 million) also owe tax money, which is due next month.

Philadelphia is projected to be over the tax again in 2024 following the Aaron Nola signing. They are estimated to have around $4 million in space before hitting the $257 million second tier for 2024. The Phillies are already projected to be well over the $237 million first tier.

The Phillies will likely finish 2024 with the highest tax payroll in club history. The team was in on Yoshinobu Yamamoto until the very end. If the Phillies had signed Yamamoto to the contract he signed with the Dodgers, the Phillies would have been over the third luxury tax threshold for 2024.

President of baseball operations Dave Dombrowski told MLB.com’s Todd Zolecki that the team is focusing on adding rotation and bullpen depth. Sources told Zolecki that the team’s No. 1 priority is re-signing Zack Wheeler to an extension.

A potential Wheeler extension, if signed, would likely be finalized on or around Opening Day to avoid having the new deal, which would likely include a higher average annual value, count towards the team’s 2024 tax bill.

Phillies projected to be over luxury tax in 2024 following Aaron Nola signing

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