Tax Type
Egg Excise Tax
Description
Governmental agencies
Topic
Persons Subject to Tax
Date Issued
12-18-1996
December 18, 1996
Re: Request for Ruling: Egg Excise Tax
Dear****************
This will reply to your letter in which you seek a ruling on the application of the Virginia Egg Excise Tax to sales by ************(the "Taxpayer") to agencies of the Commonwealth of Virginia and its political subdivisions. I apologize for the delay in providing you with this response.
FACTS
The Taxpayer is a distributor of eggs and egg products in the retail and institutional food industry. The Taxpayer also sells these items to various agencies of the Commonwealth and its political subdivisions. The Taxpayer requests a ruling to clarify the department's policy concerning which of these agencies may be exempt from the egg excise tax.
RULING
Enclosed is Code of Virginia §3.1-796.1 1 :1 through 1 1:10 concerning the administration of the Virginia Egg Excise Tax. Code of Virginia § 3.1-796.11:3 levies an egg excise tax on the purchase or sale of eggs, liquid eggs, or liquid equivalents for use or consumption in Virginia.
Code of Virginia §3.1-796.11:4 defines the terms "use" and "consumed" as follows:
Eggs shall be deemed to be "used" in Virginia if, at a Virginia location, they are incorporated into another product so as to lose their character as eggs. Eggs shall be deemed to be "consumed" in Virginia if they are actually consumed in Virginia or sold at a location in Virginia.
As a result, persons who purchase eggs or egg products from a handler for use or consumption in Virginia are subject to the egg excise tax. The handler, as defined in Code of Virginia §3.1-796.1 1:4, is required to collect the tax from the purchaser and remit the tax to the department.
No general exemption applies to the Commonwealth or its political subdivisions with respect to the egg excise tax. Article X, 6 of the Constitution of Virginia provides an exemption for "[P]roperty owned directly or indirectly by the Commonwealth or any political subdivision thereof ...." This property tax exemption does not, however, apply to the egg excise tax. In addition, there is no specific provision in Code of Virginia §3.1-796.11:5 to exempt the Commonwealth or its political subdivisions from the egg excise tax. As a result, an agency of the Commonwealth or its political subdivisions is subject egg excise tax on its purchase of eggs or egg products from a handler for use or consumption in Virginia.
I hope this clarification of our policy satisfactorily addresses your concerns. Enclosed is Virginia Tax Bulletin 96-4, which further discusses the egg excise tax. If there are further questions, please contact********************at******************
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/1046 1 N
Rulings of the Tax Commissioner