Patreon & Sales Tax (...and a warm up sketch) (Patreon)

Well, sales tax has finally come for Patreon due to their status as an "online marketplace", which had at first only applied to giants like Amazon and Netflix.  It means you might be affected with a small percentage of tax on your monthly pledge, but it depends entirely on where you live and what benefits your local government has deemed taxable.

Due to these new laws passing in several countries and US states, Patreon will be required to start charging sales tax on some pledges starting July 1st. 

According to Patreon, 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, and that's only if the whole $5 tier contains taxable benefits. 

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 - these are not earnings, and neither I nor Patreon keeps any of that money. 

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 - we were given a tool that allows us to break out exactly what is being offered in our tiers and then assign a percentage that the benefit should be "weighted".  

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 soon, but I wanted to make sure you were aware of these changes way ahead of July 1st when they go into effect. 

I hope that this post helps clarify what's happening regarding tax laws, but if you have more questions, you should be able to find answers here. If you have specific questions not answered in the FAQ, the best place to get an answer is from Patreon’s customer support team, here. I'm going to be keeping a close eye on the sales tax laws so I can keep informed of any changes going forward.

Thanks for taking the time to read all of that! Sales tax is like math homework, and now I think we all deserve a little a little treat in the form of a warm up sketch!

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