Tax policy is not, by its very nature, exciting. But we did have an interesting question come from a recent constituent outreach effort in King George County.
The question came from a woman who selling eggs with some other friends at the King George County Farmers’ Market. Different friends would take turns working on different Saturday mornings selling each other’s eggs. Her reading of Virginia law was that each “company” (individual) who sold eggs at the farmers market had to pay a flat “Litter Tax” of ten dollars. The tax is intended for stores, restaurants, and manufacturers/distributors of food and sundry products. Furthermore, some of the growers were convinced they were egg “handlers”, which required they pay an egg excise tax.

While willing to pay their fair share, it seemed a bit over the top to have each individual shuck out $10 to sell a few dozen eggs each week. In figuring out the sales tax and the litter tax, the constituent figured she was paying roughly 25% in taxes – just for the “privilege” of selling eggs on Saturday morning during the summer. This did not include any income tax she would have to pay on money she might profit from those sales. In addition, the market requires all vendors to have a federal employer identification number (FEIN).
Recognizing the tax code is as clear as mud, my aide made arrangements for a conference call with the Department of Taxation. We gathered the head of policy at the Tax Department and his crew, along with our constituent and the manager of the market. Ominously, it was the Friday morning before Fourth of July weekend - however, all went well.
In the course of the conversation, it became clear that the online the instructions create confusion as to whether an egg vendor at a farmers’ market is a “handler” by definition. The Tax Department provided clarity of the word “handler” in regards to the Egg Excise Tax. In short, it does not include a small vendor selling eggs directly.
On the Litter Tax and the FEIN, the folks from the Department of Taxation realized that a half dozen people paying a litter tax and each having an FEIN was not, perhaps, in the best interest of the Commonwealth. They offered a great solution to the litter tax problem and the FEIN: establish the King George Farmers’ Market (KGFM) as an umbrella organization. KGFM would then collect from the vendors the sales and use tax from sales made at the market, and remit that tax to the Tax Department. With one payee, there would only be one flat litter tax assessed and the amount of paperwork for keeping up with FEINs would drop dramatically. Evidently, this is a solution they also use for flea markets.
Since that conference call the King George Farmers’ Market has received information from the Tax Department’s field agent, and the folks from King George are very happy to have a resolution.
Also, they have a better understanding of the tax policy even if they don’t find the policies “egg-citing”.
The King George Farmers’ Market is open every Saturday from 8:00 a.m. to noon at the King George Elementary School on the corner of Routes 3 and 205. You can find information on other farmers’ markets throughout the Northern Neck and Virginia by visiting www.buylocalvirginia.org, search in “Find Local Foods” for “Farmers Markets” by county.