Sales Tax update
Added 2020-05-29 19:11:03 +0000 UTCPatreon has announced some changes that I wanted to share, I will provide a brief summary, but will also include the form letter explaining everything in detail below.
Starting July 1st, Patreon will be required to start charging sales tax on certain pledges. For those of you in the EU, nothing will change, as you are already being charged Sales tax.
However for those of you in other countries you may find that starting July 1st, an additional sales tax fee will be added on top of your usual pledge. This fee will amount to a relatively small percentage of the pledge itself, the height of which depends on your local taxes and the nature of your pledge (more on this below).
For more information, please read the form letter below.
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.
Comments
I think a lot of this has to do with Patreon's shift towards facilitating the distribution of physical goods/rewards which in most cases are subject to sales tax in most countries and states. If I were to provide a physical print to patrons in exchange for their pledge that is really no different from running a webshop and doing the same in terms of the transaction involved. They will be making a distinction between pledges however, this means that a lot of patrons in the United States and applicable countries will not be paying the full amount of Sales Tax and in some cases none at all, because digital goods / services are handled differently from physical ones. But yes, laws are weird.
Tasuric
2020-05-30 07:56:42 +0000 UTCSuch a weird change since you are neither selling a product nor providing a service. In essence, your patrons are funding your education and living expense; basically a crowd sourced employer. You, of course, should still need to pay applicable taxes for your location of residence but that would be like the company I work for having to pay a fee to be able pay me for my work o.O Laws are weird.
Dracasis
2020-05-30 04:26:46 +0000 UTC
