Were liquid eggs, frozen eggs, egg substitutes, and unheated hard-boiled eggs exempt from Texas sales and use tax?

Plain-English summary

The client was a Wisconsin food manufacturer buying and selling liquid and frozen eggs, egg substitutes, and hard-boiled eggs while using individuals and brokerage firms for nationwide sales and marketing.

The Comptroller classified liquid and frozen eggs and egg substitutes as specifically exempt food. Hard-boiled eggs were also exempt when sold unheated and without plates, forks, knives, or other eating utensils.

The client did not have to register as a Texas retailer or file Texas sales-and-use-tax returns if it sold no taxable items in Texas.

What this means for you

Preparation and presentation mattered for the hard-boiled eggs. The registration conclusion also depended on the seller having no taxable Texas sales, not merely on these particular products being exempt.

Common questions

Were liquid and frozen eggs taxable? No. Were egg substitutes taxable? No. Were hard-boiled eggs exempt? Yes when unheated and sold without eating utensils. Was retailer registration required? Not if the company sold no taxable items in Texas.

Citations and references

• 34 Tex. Admin. Code Rule 3.286
• 34 Tex. Admin. Code Rule 3.293

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9112L1145D03

Original ruling text

December 17, 1991

Dear **:

Thank you for your letter of October 28, 1991, concerning a
corporate client's Texas sales and use tax responsibilities.

Your client is a food manufacturer in the State of Wisconsin that
buys and sells liquid and frozen eggs, egg substitutes, and hard
boiled eggs. Your client will contract with individuals and sales
brokerage firms for nationwide sales and marketing services.

Eggs and egg substitutes in liquid and frozen form are not subject
to Texas sales and use tax under the Texas Tax Code. These products
are classified as food which is specifically exempt by law.
Hard boiled eggs that are sold in an unheated state and without
eating utensils (plates, forks, knives, etc.) are also exempt as
food products.

Your client is not required to register as a retailer with our
office or to file Texas sales and use tax returns if it does not
sell taxable items in Texas.

I am enclosing Rules 3.286 - Seller's and Purchaser's Responsibilities
and 3.293 concerning food, meals, and food ready for immediate
consumption for reference.

This opinion is based on the facts presented. If there are additional
or different facts, the opinion may change.

You may call toll free 1-800-252-5555 if you have any questions or
need more information. You may write to Tax Administration Division,
Comptroller of Public Accounts.

Sincerely,

Eddie C. Washington
Tax Administration Division