New York Yankees hit with $25.7M luxury tax

New York is the only team to pay a tax for this season and has crossed the threshold in all seven years since the tax started. According to the collective bargaining agreement, the Yankees must send a check to the commissioner's office by Jan. 31.

The Yankees have been billed $174 million of the tax's $190 million total since 2003. The only other teams to pay have been Boston ($13.9 million for 2004-7), Detroit ($1.3 million for 2008) and the Los Angeles Angels ($927,059 for 2004).

At least the Yankees got value for their spending, winning the World Series for the first time since 2000 after adding high-priced free agents CC Sabathia, A.J. Burnett and Mark Teixeira. And the Yankees did lower their tax bill from $26.86 million last year, when their streak of consecutive playoff appearances ended at 13.

New York's payroll was $226.2 million for the purpose of the luxury tax and the Yankees pay at a 40 percent rate for the amount over $162 million. To compute the payroll, Major League Baseball uses the average annual values of contracts for players on 40-man rosters and adds benefits.

The Yankees' regular payroll — using 2009 salaries and prorated shares of signing bonuses — finished at $220 million. That was a drop of $2.5 million from 2008 but more than $77.8 million higher than any other team — a gap larger than the payrolls of the bottom 11 clubs.