Miska Fredman

Important: An update on sales tax

Added 2020-05-16 18:19:10 +0000 UTC

Hi everyone,

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.

Patreon already handles charging and paying VAT (European sales tax) for patrons in the EU (and has been doing so since 2015 when the laws changed in the EU), so, this will not affect EU-based patrons.

Over the past couple of years, many countries and many states in the United States have passed similar laws that require “online marketplaces” to apply sales tax to transactions. Although aimed at the Amazons, Ebays, Netflixes, and Etsys of the world, the way these laws were written and the way they’re being interpreted means that they’re impacting many different types of companies, including Patreon.

Whether or not you will be charged sales tax depends on your location, and what is considered taxable there. 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.

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.

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.

Thank you for all of your support.

– Miska