Rockets Predicted to Make Cost-Cutting Move to Duck the Tax

To pay the tax or not to pay the tax. That is the never-ending question.

Well, it's been a topic of discussion for the Houston Rockets for seemingly a decade.

Up until the rebuild, that is.

And up until this year, when the extensions took effect. They're currently slated to pay the luxury tax.

Which is a much tougher predicament to be in now than in decades past. The NBA's new CBA is no joke. Well, it's not necessarily new, as it dates back to 2023.

The aprons are different, as it pertains to the limitations. Drastically different.

A team under the first apron loses access to the Non-Taxpayer Mid-Level Exception, while also facing much more significant trade rules.

A second apron team faces even more restrictions, as they aren't able to use trade exceptions, aggregate salaries in trades, and can't utilize cash as trade capital or first-round draft picks seven years out.

Not to mention being unable to use the Bi-Annual Exception and Non-Taxpayer Mid-Level Exception.

Then there's the issue of the repeater tax, which charges teams that have paid the luxury tax for three of the prior four seasons a much higher rate.

The Rockets find themselves just $1.2 million under the first apron, meaning they're hard-capped.

They're also $6.8 million over the luxury tax threshold. And $13.1 million under the second apron.

According to CBS Sports senior NBA writer Sam Quinn, Houston’s near seven million dollar luxury tax payment could curtailed at the trade deadline, as Quinn expects Houston to mitigate having to foot the bill.

"The Rockets should be good for a long time. They will therefore be expensive for a long time. Delaying the repeater clock certainly matters for them.

Would it be worth trying to trade VanVleet, knowing he is unlikely to contribute to his season's championship push, to both acquire someone they could use right now and duck the 2025 tax? That would be a pretty thin needle to thread."

Quinn continued, outlining other possible paths towards cost savings for Houston's front office.

"Maybe there's a trade involving Finney-Smith that gets them below the line. Something could be worked out with Chicago involving impending free agent Ayo Dosunmu to give Houston an extra usable guard. The Bulls badly need wing defenders, and the Rockets have draft picks to spare (though Dosunmu would only merit second-rounders).

Right now, the Rockets are $17 million below the tax line for next season. They could feasibly dodge the tax depending on what they pay Tari Eason and who else they keep. Amen Thompson's rookie extension kicks in a year after that... right as VanVleet's contract expires. The Rockets have options."

Quinn notes that the Rockets could justify ducking the tax for the right deal, while also noting that paying the tax could also be justified for the Rockets' brass, as that was their original intent.