The Patreon Tax Update!

Hey Guys!

I just wanted to let you guys know that I'm aware of these changes, I felt it would be good idea to let you guys know that I'm keeping abreast of Patreon's updates.

We will be seeing some changes that 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, if you haven't already.
I wanted to make sure you were aware of these changes way ahead of July 1st when they go into effect. 

As a creator I have the ability to value the benefits of each tier for the purposes of taxation.

As you know every tier has a cumulative value
(So each tier has all the value of the tier before it, with added benefits)

This means the higher the tier the more benefits you receive which means a broader percentage split on the things taxed.
For example
If the $1 Tier only has 3 real benefits, and the benefit value is split evenly, it looks like:
33% 33% 34%
Whereas the $20 tier has like 6 benefits so if treated equally the value split will look like this:
17% 17% 17% 17% 16% 16%

However I have placed greater value on each tier's unique benefit
So for example:
The $15 Tier's signature benefit is "Work in progress Benefits" What Patreon calls "Bonus Content" So I've valued that benefit at 30%
The $20 Tier's signature benefit is the "the OC Draw" Which Patreon also classifies as a type of "Bonus Content" so I have valued that as 30%
This tier also has the cumulative benefit of Work in Progress access, but its valued lower as it is not the signature benefit of this tier.

Not every benefit is taxable, so that's why the percentage value of each benefit matters. So there could be an instance of only getting taxed on say 11% of your pledge amount. Because only 11% of the benefits your got is taxable.

So hopefully that makes sense and I've done this correctly. If I did everything well I would have hopefully have saved you guys a bit of extra coin.
Again, not all of you will be taxed, but if I'm able to assist the few of you who WILL be taxed I'd be a happy monkey.  

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If you have any questions for me, feel free to sound off in the comments section of this post, I'll answer them if I can

If you have questions I CAN'T answer, you should be able to find answers here.
If you still have questions after that, the best place to get an answer is from Patreon’s customer support team, here. 

Thank you you guys for everything, your support matters to me, and yeah keep safe!
Sincerely,
TDM