Patreon is required by law to add sales tax, or VAT, or other similar taxes, to some patron payments. Tax laws in many countries and US states have evolved in recent years to require “online marketplaces” as well as video and audio streaming companies to apply sales tax to transactions.
The article and FAQs below will cover all the details about how sales tax applies to Patreon, and what you need to know to prepare.
About Sales Tax
Sales tax is charged based on the location of the patron, and not the creator. Since you may have patrons anywhere in the world, all of this information is relevant to you.
The amount of sales tax a patron pays depends on where they are located, and what you offer in your tiers. The laws and tax rates for that patron’s location will be applied whenever a patron pays the money through Patreon, whether that’s monthly, annual, or a one-off item.
How do I make sure that my benefits are taxed correctly?
We encourage creators to explore our advanced sales tax settings function. This will give you more control over how sales tax applies to your membership, and allow us to apply sales tax more accurately. Doing so may save your patrons a small amount of sales tax in some cases.
If you want to set up your tiers quickly and do not want to use the advanced sales tax settings, we will still apply the standard tax rate to your whole tier.
Check out our article, About Advanced Sales Tax Settings, for details and instructions.
Should sales tax apply to Patreon? Is supporting a creator on Patreon the same as making a purchase?
Some patrons may decide to pledge outside of your set tiers. For example, they may have pledged an amount above your set tier price or you have given them the option to pledge without receiving pledge benefits. In many jurisdictions, this amount would be akin to a “tip” and treated as non-taxable.
I thought sales tax was only applicable on tangible goods?
I am a creator located outside of the United States. Does this apply to me?
If the advanced sales tax settings are not used, Patreon will automatically detect what’s in your tiers, and apply the right tax rate for each patron’s location. This may mean we apply sales tax to your whole tier rather than just the amount you have told us relates to taxable benefits.
|Typical Benefit Type||Examples||U.S. Status|
|Donations/Support||Support only. Languages such as "pledges whatever"||Currently exempt from Sales Tax in the majority of states|
|Recognition||Shout-outs, names in credits||Exempt in the vast majority of states|
|Exclusive Community Access||Patron-only posts, Discord, server access, polls||Exempt in the majority of states|
|Streaming Content||Extra podcast episode per month, videos, bonus content||Taxable in roughly half the states|
|Downloadable Digital Goods||PDFs, computer game builds, downloaded color pages||Taxable in roughly half the states|
|Physical Goods||Candles, T-shirts, mugs, mailed coloring pages||Taxable in all states in which Patreon is collecting, unless the item is a one-time thank you gift|
, and what are the tax rates?
Patreon collects, files, and remits sales tax (also known as VAT in many countries). We continue to monitor rules that govern the sale of online content and creation to ensure sales and pledges made through Patreon comply with local tax laws.
An overview of the standard sales tax rates per jurisdiction can be found below:
|Country||What sales tax is called||Tax Rate|
|Canada (Quebec only)*||QST||9.98%|
|Canada (as of July 15, 2021)||GST||5%|
|Columbia (as of January 2, 2021)||VAT||19%|
|Malaysia (as of June 1, 2022)||SST||6%|
|Saudia Arabia (pending)||VAT||15%|
|South Africa (pending)||VAT||15%|
|Thailand (as of July 15, 2021)||VAT||7%|
|United States (36 states plus D.C.)||Sales Tax||ranges from 4% - 11%|
* To comply with local laws, there are some countries or regions where we do not charge VAT/GST to patrons who are supporting a creator located in the same country as them. However, if those patrons support creators in other countries, they may still be charged VAT/GST on those pledges if the benefits they receive are taxable in their country. Affected regions: Belarus, Quebec, Australia. For more details about this, please refer to this section: Sales Tax FAQs for Australian creators and patrons
** Please note that Canadian provinces may add local tax in addition to the federal rate
|Country||Value-Added Tax Rate|
|United Kingdom of Great Britain and Northern Ireland||20%|
|States where Patreon collects sales tax||States where Patreon does not collect sales tax|
|Colorado||North Carolina||New Hampshire|
|District of Columbia||Ohio|
|Florida (as of July 15, 2021)||Oklahoma|
|Kansas (as of July 15, 2021)||Utah|
Canada - province/territory breakdown
|Newfoundland and Labrador||15%||15%|
|Prince Edward Island||15%||15%|
What is the rate being charged?
Will more states/countries start requiring Patreon to charge sales tax in the future?
What about Patreon’s Merch for Membership? Are tiers that include that merch taxable?
What are the new advanced tax settings and how will they save patrons money?
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 pledge that should be taxed per patron, in locations where tax laws allow us to do so.
For example, imagine you have a $5 patron 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. So for that patron in CA, it could save them 30 cents or so in sales tax.
Is there a way I can find how much sales tax is being collected from my patrons?
Sales Tax FAQs for Australian creators and patrons
Should patrons in Australia that support a creator in Australia be charged GST?
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 pledges from patrons in Australia that support creators in Australia. However, if those patrons support creators in other countries, they may still be charged GST on those pledges if the benefits they receive are taxable in Australia.
Do I as a creator need to be registered for GST?
If GST already applies to your business under existing rules (i.e. you are an Australian-based merchant 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 on merchants who charge GST.
If I don’t earn enough from my business to meet the threshold for GST, should my patrons be charged GST?
For creators located in Australia, GST from Australian patrons will remain your responsibility. Patreon will not collect GST from patrons in Australia on pledges 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 patrons that pledge to you from certain countries outside of Australia.
You must register for (and begin collecting) GST when your business or enterprise has a GST turnover (gross income minus GST) of AUD$75,000 or more ($150,000 per year or more if you are a nonprofit). Go to the ATO website for additional information.
What is subject to GST within Australia?
GST tax applies to a very broad range of things. Technically the law states “any form of supply whatsoever,” which extends well beyond the scope of “goods” and “services”. That means tangible and intangible goods as well as any provision of admission or access or information are subject to GST. However, under Australian law, GST would not apply to any payment made that is NOT in connection with a supply of anything. In other words, General Support, which you can add as a benefit using our advanced sales tax settings, is NOT subject to GST. Also, any transaction of multiple items in one payment that contains separately identifiable parts is a “mixed supply” under Australian law. This means you can use our advanced sales tax settings to adjust the value of your benefits to distribute the pledge amount between the different benefits in each tier, so we can apply the GST only on the taxable portion.