UtahS.B. 1012026 General SessionSenateWALLET

Specialized Product Amendments

Sponsored By: Evan J. Vickers (Republican)

Signed by Governor

AgricultureControlled SubstancesHealth and Human ServicesState Tax CommissionRevenue and TaxationAgriculture & FoodMedical Cannabis

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 5 benefits, 4 costs, 2 mixed.

Cannabinoid and kratom retailers need licenses

Beginning January 1, 2027, retailers need a Utah State Tax Commission license before selling or offering cannabinoid or kratom products. Each renewable license covers one fixed business address for three years. Applications must include the retailer's name, sales address, and other required information; the address must be legally allowed for these sales. Retailers must meet licensing rules at renewal, and the commission may charge $50 for each issuance or renewal. Unlicensed sales or offers carry a class B misdemeanor and a $1,000 administrative fine.

Tax records help locate unclaimed property owners

When requested, the Tax Commission must give the unclaimed property administrator specified identifying and contact details from income tax returns. Sharing is allowed only as far as federal law permits. The administrator can use the information only to return unclaimed property and must follow the commission's confidentiality rules. This helps locate owners but does not guarantee a payment or property return.

Visitors avoid personal-use cannabinoid and kratom tax

Beginning January 1, 2027, Utah nonresidents can bring in untaxed cannabinoid or kratom products for their own use while visiting. They do not have to file the consumer statement or pay the specialized product tax. This exemption does not cover products brought in for someone else's use.

Visitors get tax relief on outside purchases

Utah exempts qualifying personal-use products bought outside Utah and later brought in by nonresidents. Buyers must not have lived or worked in Utah when purchasing, and the products cannot be used for Utah business activity. Products other than boats and vehicles must first be used for their intended purpose outside Utah. Boats and vehicles must be registered outside Utah. Leases, rentals, and vehicles exempt under Utah Code Subsection 59-12-104(33) are excluded from this exemption.

Cannabinoid tax retailers lose bond requirement

Beginning January 1, 2027, retailers responsible for collecting cannabinoid product tax no longer face the specified licensing bond requirement. This removes a compliance duty and possible financial burden. The provision does not state the bond amount.

Businesses get tax relief on outside purchases

Utah exempts qualifying physical goods and electronically transferred products bought outside Utah, brought in, and used for Utah business. Non-vehicle property must first be used for its intended purpose outside Utah. Vehicles must be registered outside Utah and not require Utah registration based on residency. Leases, rentals, and vehicles exempt under Utah Code Subsection 59-12-104(33) are excluded from this exemption.

Higher taxes for cannabinoid and kratom buyers

Beginning January 1, 2027, Utah charges 5.3% of the retail price of cannabinoid and kratom products. The law also removes the cannabinoid sales tax exemption, so otherwise applicable sales taxes apply. Retailers generally collect the specialized product tax; without collection, buyers owe it when the product first reaches Utah. Buyers of untaxed products for use must report and pay by the last day of the month after purchase. They must keep tax records for three years after filing.

Product retailers must file taxes quarterly

Beginning January 1, 2027, retailers collecting specialized product tax must file returns and pay electronically for the previous quarter. Deadlines are the last day of April, July, October, and January. Retailers must keep tax records for three years. Missing payments or required filings, or paying late, brings penalties and interest under Utah law.

Stronger checks on kratom and cannabinoid sellers

Beginning January 1, 2027, the agriculture department must set an administrative fine of no more than $5,000 for unregistered kratom sales. It may fine sellers or people offering those products, and the fine no longer must exceed the registration fee. The department may also take administrative action against anyone offering unregistered kratom products in Utah. The Tax Commission must report suspected cannabinoid or kratom sales that violate laws outside the specialized product tax law. Within 30 days of learning about the sale, it must send the department the retailer's name, tax ID, and product identity.

Optional registration fees for product suppliers

Beginning January 1, 2027, the Utah Department of Agriculture and Food may set cannabinoid and kratom product registration fees. Kratom fee-setting is no longer required. Product registrants pay a fee only if the department sets one; the law does not specify an amount. Both fee-setting powers end January 1, 2029.

Product tax funds shift from local governments

Beginning January 1, 2027, all specialized product tax revenue after the administrative charge goes into the Specialized Product Proceeds Restricted Account. This replaces the prior split that sent 47% to the General Fund. Fines for unlicensed specialized product retail sales also go into the account. The law ends distributions to counties, cities, and towns based on their prior-year sales tax distributions. It adds kratom enforcement as an allowed use, but lawmakers must approve spending; the law provides no new appropriation.

Sponsors & Cosponsors

Sponsor

Evan J. Vickers
Republican • Senate

Cosponsors

Jennifer Dailey-Provost
Democratic • House
Rosalba Dominguez
Democratic • House
Sahara Hayes
Democratic • House
Sandra Hollins
Democratic • House
Grant Amjad Miller
Democratic • House
Carol S. Moss
Democratic • House
Hoang Nguyen
Democratic • House
Doug Owens
Democratic • House
Angela Romero
Democratic • House
Jason E. Thompson
Republican • House

Roll Call Votes

All Roll Calls

Yes: 171 • No: 1

Senate vote • 3/5/2026

Senate/ concurs with House amendment

Yes: 26 • No: 0

House vote • 3/4/2026

House/ passed 3rd reading

Yes: 66 • No: 1

House vote • 2/6/2026

House Comm - Favorable Recommendation

Yes: 8 • No: 0

House vote • 2/6/2026

House Comm - Amendment Recommendation

Yes: 8 • No: 0

Senate vote • 1/23/2026

Senate/ passed 3rd reading

Yes: 25 • No: 0

Senate vote • 1/22/2026

Senate/ passed 2nd reading