Update on upcoming Sales Tax changes (Patreon)

(There is a tl;dr version of the post at the bottom, for your convenience)

Hello, I hope you're fine despite the current worldwide situation and that you're staying safe.

I'm making this post to inform you that to meet legal requirements Patron itself as a platform starting on July 1st will now be adding a sales tax for customers that might affect some of their pledges depending on their geographical location (Namely the US and several countries).

This is a site-wide change and a similar thing was implemented in 2015 already when most patrons located in Europe started having VAT applied to their pledges (and arguably, it's something Patreon should have implemented from the get-go and not steadily roll out over the years).

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. Namely, creators are allowed to list the type of benefits they offer, because different types of benefits are applied different types of tax or no tax at all.

For transparency purposes my rewards are classified as 'Digital Goods' but I consider it equal parts (50%/50%) 'Digital Goods' and 'General Support'. 'Digital Goods' are taxable in less than half the US states (You can find a list in a link I'll give below) and 'General Support' refers to support of my work itself and is currently exempt from taxes in most states.

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 (because ethically I believe you have to be informed beforehand and it's important for you to know). 

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 and if you have any questions please let me know.

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TL;DR version:

-Patreon will start charging sales tax for all transactions sitewide starting on July 2020 for the US and several other territories.

-Not all pledges will be taxed or are taxable, it depends on your local laws and regulations. Sometimes only a fraction of a pledge itself is taxable, not the entire amount.

-My rewards are classified as 'Digital Goods' and I consider them equal parts 'Digital Goods' and 'General Support', for more information on what that means check here 

-If you have any questions feel free to contact either me or Patreon support here.