A tax provision buried in Utah's SB0101 will significantly change how gym and fitness studio retailers handle cannabinoid and kratom product sales starting January 2027.
Most gym and fitness studio owners in Utah don't realize that a provision tucked into SB0101—Specialized Product Amendments—will directly affect their bottom line if they sell cannabinoid or kratom products in their facilities. The change is substantial, and the deadline to prepare is closer than many think.
Effective January 1, 2027, Utah is replacing a flat 10-cent tax per specialized product with a percentage-based tax of 5.3% of the retail price. This change applies to any retailer—including gyms and fitness studios—that sells cannabinoid products (such as CBD, delta-8, or delta-10) or kratom products.
For most retailers, this represents a significant increase in tax burden. A product retailing for $50 would have generated 10 cents in tax under the old system. Under the new system, that same product will generate $2.65 in tax—a 26-fold increase on that single sale.
If your gym or fitness studio currently sells any cannabinoid or kratom products—whether as a primary revenue stream or as a supplementary retail offering—you are directly affected. This includes products marketed for recovery, relaxation, or wellness purposes.
Facilities that do not sell these products are not impacted by this provision.
Starting January 1, 2027, you will be required to:
Calculate and collect 5.3% tax on the retail price of every cannabinoid and kratom product sold.
Remit taxes quarterly to the Utah State Tax Commission using electronic filing. This is not a one-time adjustment—it becomes an ongoing quarterly compliance obligation.
Track and document sales carefully to ensure accurate tax calculations and reporting.
The specific statutory language can be found in Section 59-31-301 on Page 42 of SB0101.
If you currently sell these products, now is the time to evaluate your pricing strategy. You'll need to decide whether to absorb the additional tax cost, pass it on to customers, or adjust your product mix. Some retailers may find that the increased tax burden makes certain lower-priced items unprofitable to stock.
You should also begin setting up systems now to track these sales separately from other retail transactions, since they require different tax treatment. Your point-of-sale system may need updates to calculate and flag specialized product sales automatically.
If you work with an accountant or bookkeeper, this is worth discussing with them sooner rather than later. They can help you understand the financial impact specific to your operation and ensure you're ready for quarterly remittance when the effective date arrives.
For a detailed, business-specific breakdown of how SB0101 affects your operation, contact your local chamber of commerce or fitness industry association for additional resources.