Macronomicon
patreon
So Sales Tax Is Going to be a Thing
🕑 Added 2020-05-16 00:03:03 +0000 UTC
I just got a message that they'll be doing sales tax starting July 1st.
They claim less than half of everyone is gonna be taxed, and a lot of people don't count depending on what kind of benefits they're getting. I'm not really sure what category advance chapters fall under. Anyway, it's highly variable, and if you wanna know for sure, the only way is to figure out the tax code of your state, which is a cluster.
In the unlikely event you get sales take, it'll be between 4-11% unless you're outside America, then I have no idea.
Here's the sample notification they suggest putting up.
Sample post copy
Post title: An update on sales tax
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.
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.
Thank you for all of your support.
^
And that's what's going on nowadays. I don't think it'll be too terrible, all things considered. Pretty sure advance chapters count as Exclusive Community Access, a category they claim isn't taxed in most states. But we'll just have to see.
Let me know what you think in the comments.
Comments
Nim
It's based on where the buyer is, not the seller. I'm having to deal with this at work; we have to figure out the tax to charge each person who subscribes to our app, based on their zip code. It's hugely annoying.
I'm already charged Tax on my subscription, I'm in the UK.
RepossessedSoul
So I looked into sales tax for TX, since I've been floating the idea of doing something similar to you and found that TX doesn't charge sales tax for 'digital goods or services' which is what this would be considered. I pulled that from the TX Comptrollers public accounts website. It might prove to be worthwhile to maybe create an LLC or corporation that is out of TX that you use to handle the money made from your writing. Just a thought.
Nim
It's not Patreon's fault; they're just big enough that states know they exist and are going to come looking. This is incredibly annoying for service providers, particularly the part where every single town (in some states) could have different tax rules. It's a huge pain.
Nyye
Have you thought about moving to subscribestar? Patreon seems to be slowly going down hill.
Landsraad
Big Brother always gets his. My paychecks are hit for like 35%. Even taxed for social security that I'll never see in my old age.
Macronomicon
I think , since I the chapters up as posts, very few people should be taxed on them, but yeah, it is a bummer. And all sites have some kind of trade-off, whether or not you can see them.
Rhys Jones
I would consider it a donation TBH
Chris
I wonder if other sites have to deal with this crap. I had heard that a lot of people are ditching Patreon for sites that don't gatekeep.
![カネコツ[kanesys] from fanbox](https://patrefans.com/kistorage/20926.jpg)
