What Is a Liquor License?
Liquor licenses are legal permits issued to restaurants, bars, liquor stores, and other businesses to allow and regulate liquor sales. Each state regulates its own Liquor licenses through a governing agency like the Alcoholic Beverage Control Board (ABC Board) or the Division of Alcoholic Beverages and Tobacco.
Some states do not have a specific agency that governs alcohol, so liquor licenses can also be issued through the Department of Revenue or the State Treasury. Requirements and laws surrounding liquor licenses and how to get a liquor license will vary based on location.
It is common for liquor licenses to dictate:
- Where alcohol may be served
- The amount an establishment can serve to a guest
- The cost of alcohol
- How alcohol can be served
- The time of day alcohol can be served
- How and when alcohol can leave the premises.
As the owner of any establishment that sells or serves alcohol, it is essential to thoroughly understand your state and local laws and regulations. If you are unsure about your local laws, consult with a business lawyer familiar with liquor licenses.
Types of Liquor Licenses
There are several different types of liquor licenses that an establishment can apply for. The type of license will dictate the type of alcohol that can be served, who can serve it, and whether it will be consumed on or off the premises.
Beer and Wine Liquor License
- Allows the sale of beers and wines
- It does not allow the sale of liquor
- One of the most common licenses
- Easier and less expensive to obtain than a full license
Restaurant Liquor License
- Called a general liquor license
- Allows the sale of all types of alcohol
- Usually limited by the state
- It can be difficult to obtain
Bar Liquor License
- Known as a "Tavern" liquor license
- Alcohol sales must be more than 50% of total sales
- Regulations vary by state and jurisdiction
- License for an employee who serves alcohol
- Not required in all states
Establishments that wish to serve alcohol will have to determine which license best suits their business needs. Bars and restaurants that serve alcohol consumed by patrons on-site will need a different type of permit than a liquor store that sells alcohol to be consumed somewhere else.
Some businesses like breweries may be required to hold both types of liquor licenses because it is common for these establishments to sell alcohol for both on-site and off-site consumption.
For more information about liquor licenses, click here.
What Are the Requirements for Getting a Liquor License?
Most states consider a liquor license a privilege. They are a way for local and state governments to ensure that businesses that sell alcohol follow all laws regulating alcohol sales.
Laws and requirements for getting a liquor license vary by state. In each state, individual counties may also have their own laws and regulations in addition to the state laws.
It is common for local governments to require a business to obtain other permits before applying for a liquor license. Permits that many businesses need to obtain to qualify for a liquor license include:
- Business license
- Health permit
- Sales tax permit
- Building permit
- Zoning permit
While the requirement of certain permits varies by jurisdiction, other standard requirements imposed by most state and local governments include the following:
- EIN for taxes
- Code compliance certificate
- Signage permit
- Alcohol tax permit
- Certificate of incorporation
- Food handlers permit
- A current or proposed food menu
- Floor plan
- Building title
It is highly encouraged to contact a business lawyer specializing in liquor licenses to find out exactly what you need to apply for a liquor license in your jurisdiction.
How To Get a Liquor License
Getting a liquor license can be a challenging process. Many states limit the number of liquor licenses to businesses, and some states use a lottery system to administer licenses.
Before applying for a liquor license, make sure you have determined what license your business needs, and you have gathered all the permits and paperwork required by your state and local government. You can get details about your area's liquor license requirements by contacting your state's ABC board.
Some business owners choose to hire an attorney to assist in the application process. Depending on your state, the application can be pricey, and utilizing the help of a business lawyer will reduce the risk of costly mistakes on your application.
If you are ready to apply for a liquor license, follow these steps:
Step #1: The application
Your liquor license application must be completed and submitted to your local alcohol control agency. The government agency that controls liquor licenses will vary by state. You will need to submit all required documentation, like required permits, along with the processing fee.
Some information that may be required for an application includes:
- Name of applicants
- Name and location of the business
- Arrest disposition of the applicant
- Mitigation of moral character of the application
- Fingerprints of applicant
- Right of occupancy of the premises
- Zoning of the business and a sketch of the premises
- Information about partners, stockholders, and officers
- Acknowledgment of laws
Some states allow you to apply online, while other states only accept mailed or in-person applications. Contact your local alcohol control agency to find out the best way to submit your application.
Step #2: Defend your proposal
Some states, like Massachusetts, allow members of the community to protest the issuance of liquor licenses. If a community member disagrees with a liquor license, you may have to defend your proposal to sell alcohol at your establishment at a public hearing.
Step #3: Application approval
It can take up to six months for a liquor license application to be approved. If there are any issues with the application or missing documentation, the process can be longer. Once approved, you will pay the liquor license fee.
For a detailed look at how to get a liquor license in each state, read this article.
How Much Does a Liquor License Cost?
Applying for, obtaining, and maintaining a liquor license can be very costly. Each state charges different fees for different liquor licenses. Total costs will vary based on the state and the type of permit you have been granted. Liquor license costs generally include an application fee, a license fee, and annual renewal fees.
Across all states, the cost of a full-service liquor license ranges from $100 in Idaho to over $14,000 in California. The average cost, however, is around $1500.
Depending on your state's requirements to get a liquor license, you may also run into fees obtaining the permits to be eligible for a liquor license. If you choose to hire an attorney to assist in the liquor license process, your costs will increase.
How Long Does It Take to Get a Liquor License?
The application process for a liquor license can take anywhere from a couple of weeks to several months. Factors that affect this timeframe can be the completeness of the application and whether anyone in the community opposes your license.
Some state and local governments limit the number of licenses available. If your local jurisdiction has reached the permit quota, you will have to wait until a business closes and a license becomes available. This could take years.
Get Help with A Liquor License
Do you have questions about obtaining a liquor license and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from business lawyers who specialize in liquor licenses.