Tax Complexity - Is Wood Food?

One reason why the tax law is complicated is that many items are singled out for special treatment including often, to be non-taxed. For example, most states do not impose sales tax on groceries. Yet, some tax soda and other types of groceries or food. The complexity lies in trying to define the item(s) that gets the favorable tax treatment. If all items were taxed the same, there would be no need for special rules and the laws would be far less complicated (and the rates could be lower because the tax base would be larger).

The question of what is "food" is currently before the Streamlined Sales & Use Tax (SSUTA) group. The question is whether hickory wood that is purchased to be burned so that the scent can enter the food, is food (it is used to create "wood-grilled" food). The significance of it being food is that a state that has adopted the SSUTA, can either subject food to sales tax or exempt it. The benefit offered by the SSUTA is that all states that have adopted the SSUTA define "food" the same way.

Per the SSUTA website - "Pursuant to Governing Board Rule 902 this shall serve as official notice of the commencement of the public comment period for the interpretation request concerning whether or not wood used to create smoke is a food or food ingredient (RI11001)."

You will want to click on RI110001 to see the 73-page (!) analysis of this question by the taxpayer asking it.

My observations:

• Sales tax laws could be simplified by removing most exemptions applicable to individual consumers. All food should be subject to tax. Relief can be provided to low-income taxpayers through both refundable income tax credits and food stamps (or similar transfer, such as a debit card).
• For the immediate question on the wood for smoking, I would think most people would initially say it is not food because we don't eat wood. But the sole purpose is to flavor the food. Is this similar to lemons - they flavor the food but we throughout the rinds (usually).
• But what if the wood is also used to cook (heat) the food. That is a tougher situation because we don't eat heating supplies.

What do you think (about both the complexity angle of exemptions and the specific question asked of the SSUTA)?