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In this article, we’ll explore the process of getting a liquor license in order to start your personal or business. We will also cover how much it costs and what are the requirements for each state.
Liquor licenses start at roughly $300 and may cost tens of thousands of dollars depending on where you live. The processing period varies between three and twelve months. The standards for state, county, and municipal licensure are all different. License brokers or permit expeditors are regularly used by business owners in metropolitan markets like New York and Los Angeles to manage the application procedure.
1. Figure out what kind of liquor license you’ll need
You must first determine which sorts of liquor licenses you will need before applying for one. State-by-state requirements and costs vary somewhat. The Alcohol Beverage Control (ABC) board in your state may inform you what your company requires in order to be lawfully licensed. It’ll be able to tell you which licenses you’ll need and how much they’ll cost.
While license types differ by state, the sort of license you’ll need is usually determined by your responses to the following questions:
- What type of business do you run? Are you a bar, restaurant, retail business, or hotel, for example?
- Is it more common for people to drink off-premises than on-premises? Brick and mortar retail businesses or websites that sell and ship spirits are examples of off-premise enterprises. Bars, restaurants, and/or catering enterprises are examples of on-premise operations.
- What kind of alcoholic beverages do you sell? Different licensing classes exist for beer, wine, cider, and liquor. States that allow the selling of cannabis products may additionally have a distinct licensing category for enterprises that sell both marijuana and alcohol.
- Will consumers be bringing their own booze, or will you be storing and serving it? Licenses are still required for bring-your-own-bottle (BYOB) businesses.
- What are your selling hours? The longer you remain open, the more costly the permit becomes.
- Will you be open on Sundays to sell? Sunday purchases in several states are subject to a surcharge.
- Do you make, distribute, or sell alcoholic beverages, or a combination of the three? Licensing regulations for breweries, wineries, and distilleries are all different.
Consumption on-premise vs. off-premise
Liquor licenses are divided into two categories: those for on-premise consumption and those for off-premise use. On-licenses and off-licenses are terms used to describe these types of agreements. On-licenses are required for enterprises such as bars, breweries, and restaurants that propose to sell alcohol to consumers for consumption on the premises. Businesses that sell alcohol to-go, such as liquor shops, have off-licenses.
Select the Correct Licensing Class
Licenses are further classified by class under the on-premise and off-premise categories. The sort of alcohol your company is allowed to offer is determined by the licensing class. Some states use letters to designate the different licensing classes, while others use numbers.
In Washington, D.C., for example, a full-service restaurant with a full bar serving wine, beer, and spirits requires an “On-premises Retailer Class C/R license.” In California, the same company would need a “Type 47” license. It’s an “OP 252” in New York City. Whether a state utilizes letters or numbers to differentiate across license classes, the criteria used to establish the various categories tend to be the same.
Classifications of Off-premise Liquor Licenses
Off-premise liquor permits are classified in two ways by liquor licensing agencies. The first difference is between brick-and-mortar and internet stores. The licensing possibilities for both kinds of retail establishments are depending on the things they sell. One kind of license allows for the sale of beer, wine, and liquor, while another just allows for the sale of beer and wine.
- The license authorizes a business to sell spirits, beer, and wine for consumption outside of the licensed premises.
- This license only allows a business to sell beer and wine that will be consumed outside of the permitted premises.
- Internet sales of beer, wine, and spirits: This permission allows shops that do not have a physical storefront to sell spirits, beer, and wine online.
- Only sell wine and beer over the internet: This license permits a shop to sell wine and beer online without having a physical location.
Liquor License Classes for On-Premise Use
There are also many sorts of on-premise licenses available for various types of businesses. There are far more on-premise licensing classes than there are off-premise license classes. This makes sense when you consider the range of companies that provide alcohol on-site. A liquor license is required for a bed-and-breakfast that organizes a weekly wine tasting, but it is not the same as for a restaurant with a full bar.
The many forms of on-premise liquor licenses are classified according to the type of business:
- Tavern: This license is for establishments that primarily make money from the sale of alcoholic beverages, such as bars. A Nightclub License is also known as a Nightclub Permit.
- Brewery: This license permits spirits producers to offer their products on the same premises where they are made.
- Restaurant: This license allows restaurants to sell any sort of alcohol, but it restricts the amount of money they may make from it.
- Beer and wine: This license is for establishments that want to serve beer or wine (typically as a culinary accompaniment) but not hard liquor.
- Seasonal: This license is designed to meet the demands of enterprises that only operate during the summer or winter, such as ski resort pubs and restaurants.
- Special Event: These licenses allow spirits to be sold in non-traditional locations for special events such as weddings or fairs.
- BYOB: This sort of permission applies to establishments that enable customers to bring in their own bottles of wine or beer to drink on the premises.
There are many more categories in certain states. For firms that operate on docks or in open water, for example, seaside communities may have unique licensing requirements. Serving cannabis-infused foods on your premises may affect the kind of liquor license necessary in markets where it is legal. The majority of state alcoholic beverage regulatory boards’ websites provide a quiz that will direct you to the appropriate license type.
2. Check Your State’s Liquor License Requirements
To find out about particular pricing, availability, and procedures in your region, contact your state’s local ABC board. Choose your state from the list below to see the typical pricing range for licenses in your region, as well as the website for your state’s liquor licensing office. It’s vital to remember that these are merely the state’s filing and processing costs. If you purchase a liquor license from an established company, your overall expenditures will be greater.
Determine the Availability of Permits
Liquor licenses are scarce in many states and municipalities. Many localities are currently at capacity for liquor licenses and have few if any, new permits are available. Depending on your region, you may need to verify availability at the state, county, or municipal level.
The ABC board may notify you of any restrictions on the availability and check whether or not a liquor license in your class is available. It may also clarify how new license requests are handled, which differs by state. If there are more applications than licenses available, several California counties arrange a lottery.
Buying a Liquor License from an Existing Company
Even if no new liquor licenses are available in your region, there may be alternative options for getting a license. Some localities enable liquor licenses to be sold by establishments that are shutting down. The ABC in your state usually keeps track of this procedure and may notify you of your alternatives. Illinois, for example, makes contact information public to all current licensees.
You may have the choice of acquiring only the license or the complete restaurant when purchasing an existing liquor license. Purchasing an existing liquor license or a company that already has one entails many of the same processes as getting a new liquor license. You must still go through the same procedure as if you were applying for a new liquor license. You may, however, apply for temporary permission that will enable you to continue operating while your application is being evaluated, which will generally take 120 days.
3. Calculate the cost of a liquor license
Liquor licenses may cost a lot of money depending on where you live. Most places impose a minor filing cost of $100 to $300, followed by a higher filing fee after your application has been granted. Cities and counties with dense populations have their own licensing procedures and costs in addition to state licenses. For example, in Los Angeles County, all companies that serve alcohol must get a Conditional Use Permit (CUP). The cost of a CUP varies based on the hours of operation of your company, with those running later hours paying more.
The application fee and filing charges for numerous sample states are shown below. In order to compare apples to apples, the license type shown below is a new license for a restaurant in a big metropolitan region that wishes to offer beer, wine, and liquor until around 2 a.m.
State-by-State Fees for New Liquor Licenses
*Purchasing a license from an established firm will result in a higher total cost. Existing license prices are determined by supply and demand in your region.
Funding Options for Liquor Licenses
If you’re beginning a new company, though, getting a liquor license will be a small part of your overall expenditures. You’ll need to rent and set up a storefront, buy inventory, recruit and train employees, and market your company. Bank loans, small business loans, and business credit cards are just a few of the small company finance choices accessible.
4. Complete your application for a liquor license.
You must submit a license application whether you are receiving a new license or purchasing one from another company. The approval procedure might take months, and if your application is incomplete or includes mistakes, it can take much longer. Preparing for the application procedure properly might save you months of waiting time.
In most circumstances, acquiring a liquor license necessitates having the following:
- A unique number assigned to an employer.
- Any zoning permits that are necessary
- Obtain a business license
- Permit to Collect Sales Tax
- Permit to Collect Alcohol Tax
- Permit to work as a food handler (if you are selling food)
- Permit for construction
- Permit must be signed.
- Permit for health
- Permission to use music (if you play copyrighted music)
Your application for a liquor license will be placed on hold until all of these papers have been obtained.
If you’ve been in the company for a long, be sure you’re up to date on all of your tax payments. If you are late on your taxes, the state will not consider your application for a liquor license. With your liquor license application, you must also provide a current leasing agreement.
If you’re a new company, getting a lease and securing a location before obtaining a liquor license may seem daunting and contradictory, but it’s a must. Work with your landlord to include an escape clause in your lease to reduce any danger. If you are refused a liquor license, you will be able to terminate the leasing agreement.
5. Submit your application for a liquor license to the ABC.
After you’ve completed your preparation work, it’s time to submit your application to your state’s ABC Board. This normally entails printing a form from your state government’s website and mailing it or delivering it in person to the ABC board.
What to Include
The majority of liquor license applications need a lot of information about your company and its proprietors. Most liquor license applications need background checks, fingerprints, and financial information in addition to copies of relevant permits.
These things might include:
- A non-refundable processing fee is charged in almost every state. Some of them are merely down payments on the licensing cost. Depending on the kind of permit you require, Ohio charges a $50 to $100 processing fee.
- Forms for background checks: At the very least, a background check will be conducted on the company owner.
- Fingerprint(s): For a background check, most states demand fingerprints.
- As previously stated, you will be required to present a valid lease agreement for your company site.
- Sheet of financial verification: Some licenses are conditional on your business’s total predicted alcohol revenue.
Approval of Liquor Licenses
The approval procedure varies by the state when you submit the form with copies of permits and a set of fingerprints. Obtaining your license usually takes five to six months. Approval might take up to a year in big areas like Los Angeles.
To give you an idea of what occurs in Ohio once you submit your application:
- The application is entered into the system and sent to the appropriate legislative bodies and authorities in the area.
- The ABC board consults with local authorities to evaluate zoning limits and the availability of new permits.
- Background checks are handled by the ABC board in collaboration with the Ohio Bureau of Investigation.
- A Division Compliance Officer conducts a physical inspection of your property, identifying any schools or churches within 500 feet. (They’ll be alerted, and they’ll have 30 days to object.) If your company fails inspection, you must remedy any problems and seek a re-inspection.
- If there are any complaints, a Public Hearing is held.
- Your application should be approved if no one files a complaint or if all issues have been settled.
- Your permit will arrive in four to eight months.
Tools to Help You Get Through the Process
Obtaining a liquor license might seem to be a daunting task due to the many moving parts involved. The procedure might be long, especially if you are opening a new restaurant. Permit expediting services or liquor license brokers may be found in practically every region to assist you with your liquor license application.
Of course, there are expenses associated with each of these services. They are, nevertheless, well worth it if they save you administrative time or the expenses of re-filing incomplete or erroneous applications.
Lookup Services for Licenses
License search tools are available on a number of legal service websites. These are a very affordable approach to verify that you have the necessary information for your area’s permit and licensing needs. For $99. Incfile, for example, has a Business License Research bundle. This service gives a comprehensive list of all the licenses and permissions your company need, as well as copies of the application forms you’ll need to submit.
A licensing research service is a cost-effective solution to ensure that all of your bases are covered. (Image courtesy of Incfile)
Brokers of licenses
Liquor license brokers will be quite simple to discover in densely populated areas such as New York and Los Angeles. A liquor license broker, often known as a consultant, will typically manage your complete liquor license application from start to finish. This is particularly handy if you’re buying a license off the street or from a company that already has one.
You may locate a licensed broker or consultant by searching for a “liquor license broker” (or consultant) and your area on the internet. Another alternative is to get suggestions from local company owners. Once you’ve found a broker, inquire about how they go about researching available licenses. You’ll want to double-check that any license you purchase from an existing company is clear of tax or vendor liens. With your purchase, you may inherit such concerns.
The cost of a licensed broker varies greatly depending on where you are. The majority of brokers and consultants will provide you with a free quotation depending on your company’s licensing requirements.
Expeditors with Permits
Former health or building inspectors are often used as permit expeditors. Some, on the other hand, are business lawyers with a focus on the hotel sector. Permit expeditors, in any form, are professionals in navigating the permit procedure and have a large network of connections at municipal offices. Most permit expeditors want to handle all of a new business’s permits. However, some people are ready to manage a liquor license on their own, particularly if it involves a transfer of an existing license from one firm to another.
Permit expeditors may be found in your region by searching for “permit expeditor” and your location on the internet. Request referrals from local business owners if you have a network. Permit expediting costs vary greatly based on your demands and region. Most expediting services, like brokers, will provide you with a free price that is customized to your specific requirements.
The Challenges of Obtaining a Liquor License
You must be of legal drinking age and a US citizen to apply for a liquor license. Many states have limitations on the days and hours when alcohol may be sold. They may also mandate that food sales account for a certain proportion of your total income.
Your liquor license application will be sent to local businesses, schools, and churches within a set radius of your proposed site. They often have the option to submit an objection. These objections may often result in a full-fledged appeals procedure, during which your hours of operation or usage of outdoor places may be restricted until your license is granted.
Your application will be rejected if it is incomplete or includes mistakes. Re-applying in many areas necessitates paying all of the licensing costs all over again. If the authorizing agency is busy, it may take many months for you to get a denial, in which case you will have wasted both time and money.
Getting Your Liquor License Renewed
Most liquor licenses are valid for one to three years. The hours vary according to state and municipal laws. There is no assurance that your license will be renewed automatically. Your renewal request may be refused if you have received noise complaints or served minors. However, if you’ve done your job well and haven’t had any major complaints, you should be able to renew your license with ease.
The renewal charge may be identical to or much less than your initial fee, depending on your state. For example, a new license in California might cost more than $13,000, yet the yearly renewal charge is just $876.
Frequently Asked Questions (FAQs)
What is the average time it takes to get a liquor license?
A liquor license might take anything from four months to over a year to get.
How much does a liquor license cost?
Liquor licenses may range in price from a few hundred dollars to more than $14,000. The price is determined by your state and city. In general, licenses will be less expensive in rural locations and more costly in competitive urban cities like New York City and Chicago.
What exactly is a temporary liquor license?
A temporary liquor license permits companies to sell beer, wine, or liquor for a short time. Depending on the state and kind of permission, temporary liquor licenses are normally good for 90 to 180 days. They’re utilized for special occasions or by new establishments that wish to offer alcohol before getting their permanent license.
Is a liquor license required to sell wine?
Yes. A liquor license is required to sell wine in any restaurant, bar, or retail shop, whether consumers drink it on-premise or off. Some states create an exemption for establishments that provide consumers with a free beverage, such as hairdressers.
Conclusion
Obtaining a liquor license is a lengthy procedure. It will take months, and there will be a lot of back-and-forth questioning and information verification. The easiest method to guarantee a smooth procedure is to double-check all of your state’s and city’s application criteria before submitting them.
