Distribution of luxury-tax funds
• 2005 CBA: Teams that did not pay tax each received 1/30th of the total tax fund. Taxpaying teams forfeited their tax distribution -- their money was used for "league purposes" such as the revenue-sharing program.
• 2011 CBA: No more than 50 percent of the tax funds can go exclusively to teams that did not pay tax.
• Who benefits? The previous tax system created a "cliff" at the tax threshold -- a team that was $1 under the tax line received a full tax distribution (about $2.4 million in 2011), but a team that was $1 over the tax line didn't receive anything.
Because of this cliff, teams needed to be very careful with their spending when they were near the tax threshold -- in fact, it looks like Houston was burned in 2011 by straying just $800,000 above the limit. The new system softens the blow for teams that exceed the tax line by just a little. For example, under the new system, Houston would have had to pay $800,000 in tax, but may have been eligible for a payout to offset their tax bill.
However, while the new agreement stipulates that no more than 50 percent of the tax funds can go exclusively to teams that did not pay tax, it doesn't specify what happens to the other 50 percent. It is possible the remaining tax money will be distributed to all teams in equal shares, but it's also possible the NBA will reserve this money for "league purposes."