On May 6th we let you know that Patreon is being required by law to add sales tax to more patron pledges from July 1st 2020. As part of that announcement, we promised to provide settings which will allow creators to give a lot more detail about what patrons are getting as part of their membership.
Today we’re letting you know that these new Sales Tax Settings are now live, and we’re encouraging all creators to take some time to make full use of them. By giving us more detail about what’s in each of your tiers, it gives you a lot more control over how sales tax will be applied to your membership and potentially save your patrons money on sales tax.
Click here to start the guided walk through. If possible, we recommend going through these changes on a laptop or computer, not a mobile device, to ensure you can see our pointers along the way.
To help guide you through every step of the settings, here are some more resources:
I’ve made adjustments to my Patreon regarding sales tax, but I got another email that I haven’t done what I’m supposed to. I just went in and edited some more things. How do I know if I finally filled out everything correctly?
Hi @Music_is_a_Rainbow
We’re terribly sorry for the confusion regarding the sales tax email! If you received this email, it is because you have not finished updating the “Adjust benefit value” feature. To finish this:
Click on Edit Tier on each one of your tiers
Scroll down to the Advanced settings and click the arrow to open
Check the box that says “Adjust benefit value for sales tax”
Then follow the instructions This step needs to be completed on all of your tiers, published and unpublished.
A small percentage of creators have completed the settings over the weekend. If so, you’ll see a pop up message when you login to Patreon.com telling you that you have completed the process and can disregard the email. So sorry again for the confusion! Let us know if you have any other questions - we’re always happy to help.
Hi Lewis, so sorry I missed your message! If you haven’t already, click here to see how to bulk message your patrons. We also have sample messaging you can use and adapt for a message to your patrons about this change. Hope this helps!
I also received the email saying I didn’t finish the sales tax setup. As far as I can tell, I went through all the steps Reyna is describing, back on June 8th, for each of our tiers. I really have no idea what remains undone. It isn’t related to the message about moving the Patreon bot around in Discord, is it? (When I open the Advanced settings, I get a notification in red letters about having to adjust this; but it doesn’t seem that it should really affect the sales tax being charged.)
I also received an email saying “You didn’t finish your sales tax setup for July 1st!”. This is despite me despite completing this process 2 weeks.
I just clicked through all of my reward tiers, both published and unpublished. As far as I can see, I have specified the benefits for all of my tiers, as well as the relevant % figures for ‘Benefit value’. (Except for the tiers where there only is one benefit, so it is 100% by default).
I’m genuinely unsure as to why I got this reminder email when I think I already completed this task.
I too got the email. The response by reyna says “it is because you have not finished updating the “Adjust benefit value” feature”. Not so for me. That was done a couple of week’s ago.
Update: I emailed the Patreon support team about this, and they looked over my rewards tiers, and confirmed that I had already completed the sales tax setup OK.
So, the email was sent to me by mistake. Just posting this here in case anyone else is scratching their head at why they were emailed…
First off, sales tax is not dependent on where you live, it’s all based on where your patrons live. If they live in an area that has sales tax for physical or digital goods and some of your items fall under those items that are taxed in their area, they they get taxed. It has nothing to do with you and where you live, at all.
Second, not all platforms have implemented a sales tax things yet and some aren’t subject to but the governments around the world want a cut of the digital sales space and they are starting to enforce the laws around digital sales taxes. It’s not something we really have control over and patreon as the server that it is, is bound to follow those laws.
By the sounds of it though, your tiers would fall under the “General Support” bracket inside the sales tax settings, which is not taxed in the majority of places so if you take the time to set that up, then it is unlikely that your patrons will get charged sales tax unless they live in a few places that do have laws around it.
Hopefully that helps a little. A lot of this information is laid out pretty simply in a lot of the FAQs and answered in questions in these threads as well.
What is being taxed depends on what you offer on your tiers. The FAQ on this and other FAQs on this implementation states what sorts of items might be taxed depending on where you patrons are, if it’s applicable to them. If your stuff is public and you are accepting donations only, then you only need to set your tiers to “General support”, which, as i said, is not generally taxed because it’s considered more of a donation/tip than for a sale taxable item and that will put you back in line to where you were before for donations.
Sales taxes on digital goods have been around a while but enforcement is happening more so now than it has before and some laws are becoming clearer on where it’s applicable and what kind of store fronts need to include them.
You also need to realize that MANY people on patreon are not simply taking in donations and while patreon may have started as a “tip jar” platform, that is not what it is now. It is a marketplace. In your case, you set your tiers to “General support” and you’re good to go. For many of the creators on patreon, including myself, sell digital and physical goods as well as exclusive content and in some places in the world, those have applicable sales tax and are NOT DONATIONS. Patreon is conforming to those requirements based on what their platform hosts. Patreon is vastly different from GoFundMe over all and just because you may use the two in a similar way doesn’t mean that that makes patreon except when other folks do sell sales taxable items.
Hey @Lewis_Lafontaine, it’s tough to answer this since sales tax differs pretty much every where – by country, by state, by city. In some areas it’s even down to the zip code. Some of these areas are now implementing tax on digital goods, as well as early access, ect. Though like Temrin said, sales tax is applied based on your patrons location. Not your location, in New York.
If your tiers do not offer exclusive benefits, you can label your benefits as 100% General Support, and your patrons won’t be taxed on this.
I hope this helps! Please let me know if you have any further questions. I’m always happy to help
Hey @DysonLogos, so sorry for our delay here. We’ve not forgotten you and this tricky situation you’re in. I’m sending you an email and DM so we can set up some time to chat through this as we have a few options but they are more complicated and will take a bit longer to explain.
