Smith, who was told by the league he needed to cover a tattoo of the clothing brand Supreme that he added on his calf in August or he would be fined, said Tuesday before the Cavs' preseason game against the Celtics in Boston that he will shield the tattoo with a sleeve.
"I'm not giving them money that could go to my kids,'' Smith told ESPN. "I was looking into (my rights), but the players' association just texted me, and you know what? I'm not going to put money in their pockets. Not a chance."
Smith insisted he did not have an endorsement agreement with Supreme and decided to get the tattoo on his own. He has complained about the NBA's stance in recent days on Instagram.
"It was just something that I wanted to do,'' he said. "There's a lot of other things going on in this world (the league) could be worried about besides a tattoo, but it's their league. They can do what they want."
A league spokesman told ESPN's Darren Rovell on Saturday that rules prohibit players from displaying any commercial logos or corporate insignia on their bodies or in their hair.
There is precedent for the league to take action. In 2013, the NBA made Smith's former teammate Iman Shumpert take out the Adidas logo shaved in his hair. In 2001, the NBA ruled that former Portland Trail Blazers big man Rasheed Wallace could not wear a temporary tattoo promoting a candy bar company during games.
ESPN's Dave McMenamin contributed to this report.