About The New Sales Tax On "Digital Goods" (Patreon)

Update: as of September 22, 2020 Patreon reversed this change, so everything in this post no longer applies...

Original Post:

Patreon is going to be emailing you guys about a new law in the U.S. requiring Patreon to start charging sales tax for “digital goods” in SOME areas. 

This change starts in July so we still have a month to figure out what to do. I have a few ideas but I’d like to get your feedback before making any changes.

The Problem

Some people will be charged an additional 10-20% each month, which goes to the U.S. Government. It it doesn’t go to me, or to Patreon as a company. This tax won’t apply to everyone, so depending on your local laws the effect could be 0% or as high as 20%. The email from Patreon will have more details. 

What Counts As "Digital Goods"?

“Exclusive” downloadable items like files, pictures, audio, etc. so basically everything I make for every reward tier. This only applies if Patreon is the way you access my content.

The Loophole

If the content isn’t being “sold” "exclusively" through Patreon, the tax DOES NOT apply. This means GENERAL donations of any amount that are not connected to any rewards or benefits, are not taxed at all.

Discord As A Place To View Content

One solution to avoid “selling” digital goods on Patreon is to post the content on our Discord Server. We have about 300 people over there currently, and if you have a Discord account linked to Patreon you should get your invite automatically, but for anyone who hasn’t created a Discord Account yet, here is the link to join our server: discord.gg/mcRJq2U

It’s a flexible free chat program with lots of options for uploading and viewing files. It doesn’t have image galleries, but we get unlimited  threaded timelines similar to the feed of Patreon posts, (except in Discord I can have as many feeds as I want for different types of content). And of course there could be links to galleries and Dropbox downloads there as well. 

To give me your feedback, tell me which of these 3 groups you best fit into:

Group A: If you ARE affected by the new tax, and DON’T want to pay more for the same thing, you can change your pledge to general support - not attached to any tier - and I can send your rewards directly in Discord. This means you would stop seeing my posts on Patreon and instead view them in Discord (in a similar format). I would also package zip files containing all the content released each month for easy download and deliver it to you in a direct message link. 

Group B: If you like viewing your exclusive here on Patreon AND you don’t care about paying a few cents more in tax ($4.25 instead of $4 for example)

OR if you are living in an area not affected by the new tax OR you just don’t want to use Discord to get rewards, that means you want things to stay as they are. 

Group C: If you don’t care about the content being an exclusive reward for your support, I could use other platforms like Slushe, Twitter, and Discord to share 100% of my art. This would essentially turn Patreon into a donations page for general support only. It may lead to a loss in income for me as some people may not continue subscribing to this cow once the milk becomes free... But I’ve been considering making this change for a while as a way of reaching a larger audience, and this new tax gives me more reason than ever to switch to that way of doing things. 

If you don’t fit into any of those 3 categories leave a comment or send me a direct message and let me know your thoughts!