For the first time in history, the New York Yankees will avoid Major League Baseball’s luxury tax.
According to the Associated Press, the Yankees are on pace to finish below the $197 million payroll threshold this season — even with possible performance bonuses coming up at the end of the year. Their updated luxury tax payroll is currently up to $192.1 million after starting the season at $178.8 million.
The Yankees have paid the tax for 15 straight seasons since it was implemented in 2003, totaling more than $340 million.
Per the report, the Washington Nationals and the Boston Red Sox are currently the only teams on pace to pay the tax this season. The Red Sox payroll is at $238.4 million, and the Nationals is at $203.9 million. Boston’s base rate will increase next year to 30 percent, and Washington’s will increase to 50 percent.
Because they are finishing below the threshold, the Yankees — and the Los Angeles Dodgers, who are at $194.5 million — are set to reset their base tax rates from 50 percent of their total to just 20 percent. With next year’s threshold increasing to $206 million, that puts both clubs in solid position to add top-level talent to their respective rosters.
The luxury tax threshold each season is based on the average annual value of contracts of all players on every team’s 40-man roster, and includes more than $14 million in benefits.
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