Update: Sales Tax Being Added to Some Pledges (Patreon)

Hey RKG patrons,

We wanted to update you regarding some changes coming to Patreon that may affect some pledges.

What’s happening?

Patreon is legally required to start charging sales tax on some pledges from July 1st. It’s expected this will affect less than half of all patrons, and for most, the amount will be very small. How much is determined by where you live in the world, and what is considered taxable there. 

Here’s an example given to us by Patreon: sales tax rates in the US range from 4-11%, so if you were an Early Access patron ($10), you could expect an increase of 40 cents to $1.10. Different tier rewards are taxed at different rates, so again this might vary – we’re currently working with Patreon to evaluate our tiers and minimise this cost as much as possible. The additional money that is collected isn’t paid to us nor to Patreon – but directly on to local governments.

Why is this happening?

This is already the case for some of you. If you live within the EU, this sales tax (VAT) has been applied since the RKG patron launched. Other countries and States are slowly realising that they’re not applying sales tax for online transactions taking place within their borders. Although this legislation is really aimed at big online businesses – such as Amazon, eBay, and Netflix – it also affects Patreon and, by extension, us. 

If you are in a location affected by these changes, you should receive an email from Patreon very soon. But we wanted to provide a little more context about why this is happening well ahead of the changes coming.

We’re obviously not tax experts, but if you have any questions, feel free to DM us in privacy or we can try our best to answer anything general down below.

RKG x