Hey @smbhax, happy to provide more detail here! We just published a new help article dedicated to Custom Pledges that I recommend you read, but here’s an overview for you too.
Today, the button to "Make a Custom Pledge” appears at the bottom of your tiers.
If you have a patron that would rather not get any benefits at all to avoid any sales tax, they can edit their pledge to a custom “no tier” pledge. They can go to "Manage memberships” in the drop down menu in the upper right corner, find your membership, and click “Edit” o the right of their Tier price.
Then they’ll see a popup where they should choose “Select a different tier”, and on the next screen they’ll see all your tiers and at the very bottom is the button to make a custom pledge.
If I have a patron who isn’t in a tier, who donates a large donation each month, will they be taxed? Do i need to do anything to allocate their taxability?
Not sure if this was answered, I couldn’t find it on the FAQs, but on a patron’s end, will they see the real amount they’ll be paying? As in, if they’re on a 5$ tier, they would see 5.35$ (or whatever it may be) listed instead? Or will they only see the amount before tax, and won’t know how much they’ll be paying until after payment is taken?
Hey @Zan_Edson, great question! Patrons who are not in a tier are not taxed in the vast majority of locations, including everywhere in the US. So you don’t need to do anything to set that up. Hope this helps!
The only other question I have, is on the lower tiers, where they don’t receive any rewards, do I just put the one general support category and then they don’t get taxed?
Thanks for being patient while we confirmed some info.
If someone is new to your Patreon, when they sign up they will see the total, including any applicable sales tax, on the final screen of checkout before they finish signing up, just like when you buy something online. For patrons who are already pledging to you, if they are charged any sales tax, they will see it in their receipt each month starting on July 1st.
Hey Patreon team, could you share some information on how the sales tax would apply to registered 501c3 charities in the US? I know there’s no one-size-fits-all answer, but we have different rules and exemptions based on our status that really need to be separate from the for-profit creators using the platform, and patrons need to be informed about the amount of their contributions that are deductible if they pay sales tax on a donation. I just want to make sure this isn’t being overlooked so our donors can remain informed and properly deduct their charitable gifts to our organization.
Additionally, while donors may be able to deduct even the sales tax they are charged, there may be locations where Patreon could be exempt from collecting sales tax on our behalf just based on our federal exemption. There may also be locations where Patreon could be exempt from collecting sales tax on our behalf if we complete separate specific location-based exemption filing and provide them documentation. We’d like to work with Patreon on this but we do not know what Patreon would need from our 501c3 to ensure they’re not collecting tax when it may be exempt.
I know this varies greatly depending on where our Patrons reside, but I’d like it if there was an open channel of communication for our organization to cooperate on Patreon on these matters as a 501c3 charity (and not just posting in the Discord or forums) so we’re both using the platform properly and efficiently as a charity and for our donors!
Hey @Dorked, welcome to the forum! So glad you’ve joined us from the tax workshop today.
Like Laura mentioned during the workshop, it’s a little difficult to give a straight forward answer since sales tax is applied differently in every region. This support article has a short list of which benefits are considered taxable in the U.S. (scroll down to “Which benefits on Patreon will be considered taxable?”).
I hope this helps! If you’re looking for more specific info, let me know. Always happy to help
I am new and don’t know how to create my own thread but has anyone noticed the tax benefits we have to include with tiers is showing up with tier descriptions?
Yes, I am seeing the benefit descriptions in the section that I wrote for each tier. On one of the informational posts about creating tiers, it mentions our description will be visible and the other not. So I was wondering how to get help for that.
I guess the thing that throws me is the specific types of content and if they fall into those categories. Would music WIPs on patreon be streaming content? Where would concept art and written scripts fall? That sorta thing. Would those just fall into community extras?
Hi
I have been looking for an answer to my question and cant find it any where here. My question is do I have to do anything for sales tax as I am in the UK…? I think I seen a mention that UK is already paying VAT so I dont need to do anything is this right?
Finally I keep getting messages saying I have to add sales tax to my members and this is causing my worrying over this…if you added the fact that UK doesnt need to worry to the mass messages it would put a lot of minds to rest if you know what I mean?
Thanks in advance
Sales tax is based on your patrons location, not your own. (Patreon takes care of filing the sales tax on your behalf though so you dont have to do anything unless you have a requirement in your area to makes note of it, etc. That’s up to you to figure out.)
You have two options:
do nothing and patreons system will use keywords from your tiers to guess how much sales tax will be applied to your tiers for your patrons who live in places where sales tax for those items are applicable.
you can delve into the sales tax yourself and setup the benefits and percentages and potentially save your patrons some money.
This is explained in a few places in this thread and in the FAQ.
Sorry Temrin that didnt answer my question…I would like to know if I have to do anything about sales tax as I am in the UK …basically seen this somewhere and it said I dont need to …please someone clarify this.
Thankyou
Creators do not need to take any action. Patreon will automatically detect what’s in your tiers based on keywords, and apply the right tax rate for each patron’s location, so you don’t need to take any action and sales tax will be handled.
However , for creators who want to dig into the details and optimize, we have launched some advanced tax settings that will allow you to do so. This may save your patrons a small amount of sales tax in some cases.
