Assignment task:
You are the tax advisor for a company (the "Company") that sells pre-made pizzas that customers take home to bake. The Company pre-makes the pizzas by making the dough and adding sauce and various toppings to the pizzas. However, customers must bake the pizzas at home before consuming. State A imposes a sales tax on "Prepared food," but does not impose a sales tax if the food does not satisfy the definition of "Prepared food." The Company does not provide any utensils with the pizzas. The Streamlined Sales and Use Tax Agreement (which has been adopted in State A) provides the following definition of "Prepared food":
"'Prepared food' means:
A. Food sold in a heated state or heated by the seller;
B. Two or more food ingredients mixed or combined by the seller for sale as a single item; or
C. Food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws.
A plate does not include a container or packaging used to transport the food."
(Streamlined Sales and Use Tax Agreement, Appendix C, Part II).
Please provide an explanation to the Company on how you recommend that the Company proceed on this issue. If you had to amend this provision to clearly exempt the pizzas from the definition of "Prepared food," how would you amend this provision? Provide the language that you would recommend to amend to the statute.