According to a major league source, the Red Sox found out today that they they have indeed gone over the luxury tax threshold for 2010, which also will affect their payroll for 2011.
The source also indicated the Red Sox likely went over the threshold when they signed Adrian Beltre last winter.
By exceeding the limit they’ll be taxed at a 22.5 percent rate for every dollar over that amount. Because they’ve gone over this year’s threshold, their tax rate increases to 30 percent rate if their payroll tops $178 million in 2011. Despite the news, the team appears willing to make a move by the trading deadline if it makes sense both for now and next season.
The Red Sox are trying to obtain a reliever and have looked into another hitter, but would prefer to wait for their injured players to return. Acquiring another hitter could create a outfield logjam if Jeremy Hermida and Jacoby Ellsbury, both out with fractured ribs, come back soon.
The team had hoped to avoid paying the tax, but unless it adds significant payroll at the
deadline — which doesn’t appear likely — their tax should be a modest amount, perhaps a few million dollars.