Bulletin Number
VTB 96-4
Tax Type
Egg Excise Tax
Description
Virginia Egg Excise Tax
Topic
Basis of Tax
Rate of Tax
Date Issued
08-23-1996
Virginia Egg Excise Tax
The Department of Taxation has received questions regarding the application of Virginia Egg Excise Tax to handlers of shell eggs and egg products. This bulletin is being issued to clarify the department's policy on how the Virginia Egg Excise Tax should be applied.
Effective July 1, 1994, the Virginia General Assembly changed the Virginia Egg Excise Tax to require the last handler at wholesale to collect the egg tax from the person who purchases shell eggs and egg products for use or consumption in Virginia. Prior to July 1, 1994, the first handler to acquire shell eggs produced in Virginia was required to collect the egg tax from the producer.
This change will affect the liability of various types of businesses that purchase, sell, use, and consume shell eggs and egg products in Virginia, as well as, out-of-state wholesalers who sell shell eggs and egg products to Virginia businesses.
The tax on shell eggs remains 5 cents per case of 30 dozen eggs. The tax on liquid eggs is 11 cents per hundred pounds. The tax on other egg products is based on converting each type of egg product into the equivalent weight of liquid eggs. The conversion factors for all egg products are included with the Virginia Egg Excise Tax Report (Form EG-1) and the Worksheet for Virginia Egg Board and Conversion Calculations for Egg Products (Form EG-2) which are filed by the twentieth of each month. For example, the conversion factor for dried whole eggs is 4. Therefore, 200 pounds of dried whole egg would be equivalent to 800 pounds of liquid eggs, which is subject to a tax of 88 cents. This tax amount is calculated by multiplying 8 (the number of 100 pound liquid egg equivalents) by 11 cents (the rate of tax for each 100 pound liquid egg equivalent).
For purposes of the egg tax, shell eggs and egg products are deemed to be "consumed" if they are actually consumed in Virginia or sold at a location in Virginia to someone other than a wholesale handler.
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- Example: The handler who sells to a retail store or food service establishment located in Virginia must collect the tax because the retailer sells to consumers, not handlers. A chain of retail stores or food service establishments is a handler if it operates a centralized warehouse at which shell eggs and egg products are received. In this case, the retailer or food service distributor is required to collect the tax on shell eggs and egg products shipped to its retail stores or food service establishments located in Virginia.
- Example: The handler who sells to a retail store or food service establishment located in Virginia must collect the tax because the retailer sells to consumers, not handlers. A chain of retail stores or food service establishments is a handler if it operates a centralized warehouse at which shell eggs and egg products are received. In this case, the retailer or food service distributor is required to collect the tax on shell eggs and egg products shipped to its retail stores or food service establishments located in Virginia.
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- Example: Bakeries incorporate shell eggs and egg products into many of their baked goods, thus they are deemed to use shell eggs and egg products. The handler who sells shell eggs and egg products to the bakery must collect the egg tax if the bakery is located in Virginia.
Example: A food processor who incorporates shell eggs and egg products into prepared foods, such as frozen dinners, is deemed to have "used" the shell eggs and egg products even though the eggs may be an identifiable ingredient in the prepared food (e.g., a cooked omelet or scrambled eggs). The handler is required to collect the egg tax if the processor is located in Virginia.
Example: When a food processor processes shell eggs into another egg product, such as egg whites, pasteurized liquid eggs, dried eggs, etc., the product has not lost its character as an egg or egg product. The processor is not required to collect the egg tax until the processed eggs are sold for use or consumption in Virginia.
- Example: Bakeries incorporate shell eggs and egg products into many of their baked goods, thus they are deemed to use shell eggs and egg products. The handler who sells shell eggs and egg products to the bakery must collect the egg tax if the bakery is located in Virginia.
The law, as amended, allows the Department of Taxation and the Virginia Egg Board to exchange egg tax registration and collection information and to inform the food industry on changes in the law.
For information on registering for the egg tax, please contact:
Virginia Department of Taxation
Registration Unit
P. O. Box 1880
Richmond, Virginia 23218-1880
Phone (804) 367-8192
For other information on the egg tax, please contact either of the following:
Virginia Department of Taxation Cecelia Glembocki
Customer Services Section Virginia Egg Board
P. O. Box 1115 911 Saddleback Court
Richmond, Virginia 23218-1115 McLean, Virginia 22102
Phone (804) 367-8098 Phone (703) 790-1984
Tax Bulletins