In a move designed to clear space beneath the NBAs 2026-27 luxury tax, the Rockets announced the release of backup guard JD Davison on Wednesday.Davisons minimum contract for next season was not yet guaranteed, and the 23-year-old does not have any remaining two-way eligibility. He played most of 2025-26 on a two-way deal.As things stand, Davisons path to a standard roster spot had become much more difficult after Houstons offseason acquisitions of Bruce Thornton and Marcus Smart, a pair of guards who played last season with Ohio State and the Los Angeles Lakers.Davisons release does open up an additional training camp roster spot, which could be used to evaluate a non-guaranteed player who is either eligible for a two-way contract or potentially a fit for Houstons G League affiliate, the Rio Grande Valley (RGV) Vipers.NBA teams are allowed to carry up to 21 players in the offseason and into the preseason, but that number dips to a maximum of 15 standard deals and three two-way slots for the regular season, which begins in late October.This leaves the Rockets $14,077 under the luxury tax with 14 players.That amount is worth one day of service for the veteran minimum.If they dont make any additional moves this season, they could sign a 15th player on the last day of the season and finish with $0 tax space. https://t.co/CeAZXgxUdt Third Apron (@ThirdApron) August 5, 2026As for Davison, a former G League Most Valuable Player (MVP), the 6-foot-1 guard has proven all there is to prove at that level. Thus, hes likely to seek out another NBA opportunity elsewhere.In 28 games with the Rockets last season, Davison averaged 2.5 points in 7.8 minutes, and he was a dependable ball-handler and perimeter defender, as well.More: Rockets convert JD Davison from two-way deal to standard NBA contractA waiver of Davison was long considered an inevitability, especially after the Rockets drafted Bruce Thornton. It's also the answer to a very simple math problem.Before today, the Rockets were over the luxury tax threshold by $2.569M. Davison was set to make $2.585M. https://t.co/HhrwutqUiC David Weiner # (@BimaThug) August 5, 2026This article originally appeared on Rockets Wire: In financial move, Rockets release JD Davison from non-guaranteed deal