Patreon’s Sales Tax Requirements

This article and the FAQs below include details about how sales tax applies to Patreon, and how it may apply to your Patreon.

Please note that in this article (and generally on the Patreon platform), any reference to VAT includes reference to Value-Added Tax (VAT), Goods and Services Tax (“GST”), Harmonised Sales Tax (“HST”) and any other similar tax or indirect tax imposed in non-US jurisdictions, as relevant. This article is intended to provide guidance on both sales tax in the United States (US) and VAT in non-US jurisdictions.

Patreon is required by law to add sales tax (including VAT, GQT or other similar taxes) to some payments made by members. Tax laws in many countries and US states have evolved in recent years to require online marketplaces such as Patreon to apply sales tax/VAT to transactions that take place via their platform.

About Sales Tax

Where applicable, sales tax is charged on supplies to members and customers based on the location of the member and not of the creator. Since you may have members and customers anywhere in the world and the tax rules differ among locations, all of this information is relevant to you. 

The amount of sales tax applied to payments depends on where the member or customer is located and what you are offering. The laws and tax rates for that member or customer’s location will be applied whenever they pay through Patreon, whether that’s monthly, annually or a one-off item. Please note that the tax laws in some countries do not require or allow Patreon to collect sales tax on payments made to you, and therefore in certain jurisdictions, you may have your own tax obligations. For this reason, we always recommend that you speak to your local accountant or tax advisor.

What is taxable differs for every country, and in the US, rates and taxability vary depending on a member's location, right down to their street-level address. So, to charge sales tax accurately, and only on those things that are taxable, we need to know where the member or customer is located and what creators are offering.

How do I make sure that my membership benefits are taxed correctly?

We encourage creators to explore our advanced sales tax settings function for their membership benefits. This will give you more control over ensuring that sales tax is being applied correctly to your membership benefits. We rely on the information you provide to us about the benefits you are providing to your members within each tier offering to ensure we are charging your members and customers the correct amount of tax.

If you want to set up your tiers quickly and do not want to use the advanced sales tax settings, we will apply the standard tax rate to your whole tier (if at least one of the benefits you are providing is taxable in the country where your member is located – if none of the benefits are taxable, we will not apply tax to that payment).

Check out our article, About Advanced Sales Tax Settings, for details and instructions.

Sales Tax FAQ

• Yes. When customers purchase your digital products from your Shop, sales tax will apply to their purchase(s). Visit our Commerce fees article for more information.

• If a member is receiving benefits in exchange for their membership, their payments may be subject to sales tax, depending on what is considered taxable in the member’s location. For example, many places have passed laws that make streaming content taxable with platforms like Netflix and Spotify in mind. In those places, streaming video and audio are considered taxable.

• Some members may decide to pay outside of your set tiers. For example, they may have entered an amount above your set tier price or made a custom payment amount without joining a tier in the past (no longer an option for new memberships). In many jurisdictions, this custom amount would be akin to a “tip” and treated as non-taxable. However, in other jurisdictions, it is not possible to treat this “tip” as not taxable.

  Having a membership on Patreon can be similar to making a purchase if the member simply wants a way to pay money for a creator’s work. But many members are also motivated by the idea of supporting work they care about. Since memberships can include both motivations, the advanced tax settings allow you to tell us how much supporting your work is a motivation for your members by using categories such as “general support”.

• The laws about what is taxable vary by location, but in many places, digital goods and content are now taxable.

• Yes! Sales tax is determined based on the location of the “buyer” or “user”, so in our case, it is the paid member or customer. Patreon creators can have members all over the world. We encourage creators to review their tax settings once they launch to ensure current and future members are taxed accurately.

• No. In many jurisdictions, sales tax cannot be included in your pricing.

• We encourage creators to take some time to set up their tiers in the most optimised way possible. By using the advanced sales tax settings, you can provide more detail on the benefits you’re offering, and the relative value of those benefits. This will allow us to apply tax rates more accurately and may even save members a small amount of sales tax in some cases.

  As mentioned above, if the advanced sales tax settings are not used, Patreon will apply sales tax to your whole tier if at least one of the benefits in that tier is taxable in the jurisdiction where the member is located.

How sales tax works in different regions and how that applies to Patreon

Which benefits on Patreon will be considered taxable?

Where is Patreon collecting tax, and what are the tax rates?

Patreon continues to monitor laws governing the sale of online content and creation and will continue to update our platform to ensure sales and payments made through Patreon comply with local tax laws.

* In certain jurisdictions, a reduced rate of tax may apply to certain supplies such as digital publications (e.g. e-books). Those rates are not listed here.

** To comply with local laws, there are some countries or regions where we do not charge VAT/GST to members who are located in the same country as the creator they are paying. However, if those members support creators in other countries, they may still be charged VAT/GST on those payments if the benefits they receive are taxable in their country. Such regions where we do not apply VAT on payments made intra-jurisdictionally include: Belarus, Quebec and Australia. For more details about this, please refer to this section: Sales Tax FAQs for Australian creators and members

EU VAT – country breakdown

United States – state breakdown

• As referenced above, whether your members and customers are taxed, and at what rate, depends on both their location and the types of benefits you are providing in the tier they have joined.

  Within the United States, rates currently range from 4% to 11%. To make things more complex, some locations tax certain things while others don’t (e.g. “physical goods” vs “digital downloads” vs “digital streaming”). Outside of the United States, rates range from 5% to 25% in the countries where Patreon will charge and pay sales tax.

  It is important to understand that tax rates and rules change frequently. Patreon partners with local experts to ensure that your members and customers are taxed at the current rate for their location and the benefits being provided.

• Yes, it’s very likely. We expect more states and countries will attempt to pass similar laws or regulatory changes in the future. We are constantly monitoring our and your obligations and will keep this page up to date and with as much warning as possible.

• Sales tax applies to each transaction. For members that pay per thing, if they are in a location that requires sales tax, and the thing you offer is taxable in their location, they will find sales tax applied to each monthly transaction where you posted a “thing” during that month and the member paid for it.

• Our advanced tax settings will allow you to provide more detail on exactly what you are offering in your tiers and give us guidance on how much those benefits are worth for sales tax purposes. If we have that level of detail from creators, we’ll be able to apply sales tax to just the portion of the payment that should be taxed per member in locations where tax laws allow us to do so.

  For example, imagine you have a $5 member in California. In the $5 tier, there are three benefits, and only one of those is taxable in California. California tax laws will allow us to charge sales tax on a portion of that $5 rather than the entire amount if we know what percentage of the $5 each benefit is worth.

• Yes. Click on Payouts from the left navigation and then into the Documents tab. In the Sales tax section at the bottom of the page, you can export a CSV of yearly sales tax totals for each country and US state.

Sales Tax FAQs for Australian creators and members

• We’ve been in touch with tax authorities in Australia to help clarify this point, and we’ve updated our help articles to make it clear that we will not apply GST on payments from members and customers in Australia who pay creators in Australia. However, if those members and customers pay creators in other countries, they may still be charged GST on those payments if the benefits they receive are taxable in Australia.

• If GST already applies to your business under existing rules (i.e. you are an Australian-based merchant registered or required to be registered for GST selling digital services or digital products), then you will continue to be responsible for GST on these sales, instead of the EDP operator (Patreon). The Australian Taxation Office website has more information available for merchants who charge GST.

• For creators located in Australia, GST from Australian members and customers will remain your responsibility. Patreon will not collect GST from members and customers in Australia on payments to Australian creators. That said, regardless of Australian GST thresholds, Patreon is still, as a business, responsible for collecting and paying sales tax/VAT/etc. from members who reside in certain countries outside of Australia.

  You must register for (and begin collecting) GST when your business or enterprise has a GST turnover that breaches the local registration threshold.