It it's not your employer, then for tax purposes it will be considered that you bought your pizzas at $12.5. You always get to pay sales taxes on the $25 amount.
If it is your employer giving you the pizza, there is a different story. I can't tell you how it would work in USA, but I'll tell you how it would work in Sweden. In a few cases, which include you being an employee of United Nations, you wouldn't pay taxes on the pizza (hurray!). But if you don't qualify for the exceptions, your employer would have to account for the $25 as if it were salary and tax it accordingly. Just for amusement purposes I've computed that for you: 33% in income tax, 31.4% in payroll tax, 20% in state tax if you earn over $4500/month, and 12% in VAT (but that one your employer gets to zero in this particular example). The 31.4% is not subtracted from your payout but just paid by your employer (or yourself, if you are self-employed). All in all, you eat your free pizza worth $25 and your employer deducts from your salary $13.3 to pay in taxes, and in addition to that pays $8 in payroll taxes. That gives the tax office a neat $21 for that $25 pizza you ate for "free". Your employer also has to pay for the pizza, of course, but they can deduce whatever VAT was in its price.
So I mean there are edge-cases. If the pizza vendor is saying "normally I sell pizzas for $25, but I'm going to sell _you_, specifically, 100 pizzas for a single payment of $25 for your event", then under most jurisdictions that should be treated as a gift or income depending on context. But if the offer is "everyone who buys a pizza for $25 gets a pizza free", that's clearly not a gift or income; it's not below market value, more or less by definition! Anyone can buy it!
More specifically, it's not below market value if the market offers it for that amount. If a restaurant has a "buy one, get one free" deal, that's the market settings its market value. If a restaurant sells you specifically two for the price of one outside their standard offer, that's a gift.
I think the better question is how what most companies do with "enterprise pricing" fits in where there is no official price (i.e. nothing that obviously establishes a market price) and all offers are specific to each inquiry. What happens if the company decides to sell the same thing to one company at the fraction of the usual price but the prices aren't public. What if the company buying it is a one-person company?
Good question - I don't know. E.g. if Google paid me by giving my hypothetical one man band company a billion dollars' worth of GPU credits with GCS? Isn't that just...payment? Don't I have to declare it as some form of such?
That is considered a sales discount (you wouldn’t get a free pizza without buying another one), and as such not taxable. Just as if you’d buy something on a 50% sale.
A sales discount is not income, nor is it a gift (which are not taxable to the recipient, but are possibly taxable to the giver).
In dsign's example, where the pizza is from your employer: in the U.S., it would generally be de minimis if it's a one-off or infrequent event. If it's a regular thing though, it generally is considered income unless it's very low value. The I.R.S. ruled long ago that any single item over $100 is not de minimis, but as this was a fairly old ruling, with inflation most practitioners think the modern threshold before the I.R.S. cares is somewhere between $250-$600.
Note: I do taxes for a living. While I don't do individual taxes, I deal with gifts to employees, etc., all the time.
