Sales Tax (Patreon)

Howdy folks,

This isn’t a chapter. Settle down. Settle….

Good, that’s better.

Okay, so, the folks over at Patreon say that they are going to be required by law to start charging sales tax depending on where you live, and what you are “getting” from your pledge. They sent me some boilerplate to send you, which I’ll tack on at the end of this. They are also going to send you an e-mail about this in a few days, but they want us creators to soften the blow for them or something, I guess, so here goes.

How it works on my end is that I have to define who gets what in terms of benefits for each tier. Depending on what the benefit is, it may or may not be taxable depending upon where you live. If you love math (Who am I kidding? You’re here. Of course you love math) and really care about the breakdown of the extra ten cents that this might cost you, here goes:

For example:

A Bronzeplate gets three “benefits” for their $2.50 pledge.

1) Advance Chapters (For tax purposes: “Early Access”)

2) Access to Discord (For tax purposes, “A private community” - Typically not taxed)

3) General support (For tax purposes: “A donation” - Typically not taxed)

Now, assuming that you value all of these things equally, that’s 83.33 (repeating, of course) cents per benefit. Yes, yes, I could go in and adjust things to weight it toward one of these categories, but honestly, you’re all just here for the Discord, right? Even split.

So, if you live somewhere that taxes “Early Access” goods at 10%, and doesn’t tax “donations” or “private community access,” that’s 8.3 cents of tax that you’d have to pay on top of the $2.50 pledge. So $2.50 becomes $2.58. Again only if you live somewhere that taxes that kind of thing.

Wow, why am I bothering to crunch these numbers again? Right, the higher tiers.

So, since I don’t give you anything for paying me more (I’m pretty rude, huh?), it gets classed under donation. Here’s the breakdown.

Silverplate ($5)

Advance Chapters: 83 cents

Discord Access: 83 cents

General Support: 334 cents

Goldplate ($10)

Advance Chapters: 83 cents

Discord Access: 83 cents

General Support: 834 cents

So, assuming you don’t live somewhere super lame, it is still 8.3 cents for the “early access”, and zero for the other two categories.

At least, that’s the theory.

Right, what was I doing? Oh yeah, editing the next chapter. Details below in the boilerplate if you want them.

--SenescentSoul

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Sample post copy

Post title: An update on sales tax

Hi everyone,

I wanted to give you an update on some changes that we’ll be seeing which may affect some of your pledges. Due to new laws passing in several countries and US states, Patreon will be required to start charging sales tax on some pledges starting July 1st. 

Less than half of all patrons will be charged sales tax, and for most, the amount will be very small. For example, sales tax rates in the US range from 4% to 11%, so on a $5 pledge, that would be between 20 cents and 55 cents. 

Whether or not you will be charged sales tax depends on your location, and what is considered taxable there. Not every pledge is taxable, not all benefits are taxable in every location, and sometimes only a fraction of a pledge will be taxable. The money that Patreon collects as a result of these laws are paid directly to local governments.

I’m working closely with Patreon to ensure I’m able to save you as much money as possible when it comes to sales tax - which is not something that’s possible with other platforms.

If you’re in a location where sales tax will be required, you should expect to receive an email from Patreon with more information about this very soon, but I wanted to make sure you were aware of these changes way ahead of July 1st when they go into effect. 

If you have questions, you should be able to find answers here. If you still have questions, the best place to get an answer is from Patreon’s customer support team, here. 

Thank you for all of your support.