In my enthusiasm for getting started on Patreon, I didn’t think through all the tax-related ramifications. I knew I might have to pay income tax on the proceeds, and am glad to do so. However, I didn’t think about sales tax.
The reward I had envisioned falls under the sales tax rules where I live. This means that if I keep providing exclusive digital goods for patrons, I would be legally required to find out whether patrons lived in North Carolina, and if so, pay the relevant sales tax to the state. I’m not inclined to do this; I don’t have any way of finding out where my backers live through Patreon.
I’m going to go ahead as originally planned for this month, but I can see a couple of alternatives for after that:
- Provide no special rewards for backers (just, I hope, the satisfaction of supporting someone who’s providing useful content for free to anyone who likes it).
- Let backers suggest words for me to encode, but make the resulting stitch patterns non-exclusive and free to my blog readers.
I’m inclined toward number two, since it’s closest to the original reward.
What do you think?