What does the NBA do with the massive luxury taxes collected from teams over the cap?

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The money collected from the escrow and luxury tax systems may be distributed to teams or used for league purposes, subject to certain rules:

Escrow money:

Some or all of the escrow money may be given to teams, but only if given to all teams in equal shares.

Any escrow money not distributed to teams will be used for "league purposes."


Tax money:

Up to 50% of the tax money may be given to non-taxpaying teams. Note that there is no requirement that any of the tax money be distributed to teams in this manner.

Any tax money not distributed to teams will be used for "league purposes." In other words, at least 50% of the tax revenue will be used for league purposes each season.

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