Get a Liquor License
Obtaining a liquor license can be a long and challenging process. Each state has its own governing agency on licensing liquor. Also, many counties and towns within a single state can have additional rules about requirements and licensing procedures. It is impossible to go through every state's laws, but this article will give you a general idea on how to get a liquor license. Just see Step 1 below to get started.
Contents
Steps
Understanding What Type of License You Need
- Know your state's alcohol laws. The first thing to be aware of is that each state has its own rules and requirements regarding the supply of liquor licenses, so you should contact a local authority to find out about alcohol laws and the sale of licenses in your specific state.
- Each state has an Alcoholic Beverage Control (ABC) agency that regulates the sale and distribution of liquor, so you also contact your local ABC office for more information.
- Some states have license quotas limiting the number of places that can sell alcohol within the state, at any given point in time. Towns may also have quotas in place. It is important to know if there are any available licenses for your state and town -- if there aren't, you may have difficulty procuring a license.
- Figure out if you need an on-license or an off-license. There are two major types of liquor license required by premises that sell alcohol.
- You will need an on-license if the liquor you sell is intended to be consumed on the premises. Examples of businesses that would require an on-license include bars, restaurants and taverns.
- You will need an off-license if the liquor you sell is intended to be consumed off the premises. Examples of businesses that would require an off-license include liquor stores, grocery stores and drug stores.
- Figure out the specific class of licence you need. In some states, you will need to apply for a very specific class of license, depending on the nature of your business and the variety of alcohols you intend to sell. Some examples of the most common license classes include:
- Tavern license: A tavern license may be required in some states by businesses that serve food, but make up to half of their overall profits through the sale of alcohol.
- Beer and wine: Some smaller bars or restaurants may only be granted a licence to sell "soft" liquors like beer and wine. This license does not entitle its owner to sell "hard" liquors, like spirits.
- Restaurant: Restaurant licenses typically allow any type of alcohol to be sold on the premises. However, the license may stipulate that only a certain percentage of the restaurant's total earnings may come from the sale of alcohol. This percentage is normally in the region of 40%.
- Start as early as possible. If you plan on opening a bar or restaurant that serves alcohol, it's important that you begin the process of obtaining your liquor license as early as possible.
- Getting approved for a liquor license takes time - in some places as long as a year.
- Therefore, it should be one of the first considerations when planning your new business venture.
- Consider the cost. The cost of obtaining your liquor license can vary greatly. In some cases you will only need to pay a few hundred dollars to cover the application fee and taxes.
- Unfortunately, due to the license quotas that exist in many towns and cities, you may be required to buy a license from an existing bar, liquor store or restaurant. When this happens, the cost of your obtaining your license could rocket into the thousands of dollars range.
- When buying a license from another business, make sure to have a lawyer (preferably one who's familiar with liquor licensing) look over the agreement and answer any questions you might have.
- Write a clear outline of the type of business you will be running. As explained in Part 1 above, there are usually different licenses for different types of businesses -- for example, running a local tavern will require a different license than opening a liquor store.
- Therefore, as part of you application, you will need to write a clear description of the type of business you will be running. You should include information on whether you intend to sell alcohol for consumption on the premises and on the percentage of your total income you expect to come from the sale of alcohol.
- You should also include information on what type of alcohol you will be serving or selling -- wine, beer, hard liquor or a combination of the three. This is important as some types of alcohol (such as spirits) require a different license than others (such as beer).
- Fill in the necessary forms and provide any required documentation. You can acquire the necessary forms from your local council or ABC agency and the The Alcohol and Tobacco Tax and Trade Bureau. In some states you will need to submit an application to both the state and your local town or county.
- The application will include details about your business and your personal background. Details such as your age, your business experience and having a clean personal record may affect the state's decision to grant you a license.
- You will also need to include a number of important documents with your application, which may include: a certificate of incorporation, a partnership agreement, your company constitution, a copy of your proposed food menu, photos or drawings of the building's exterior and a floor plan of the interior, a code compliance certificate and a copy of the certificate of title for the premises.
- Be prepared to defend your proposal. After you submit your application, a notice will be posted at the proposed location of your business, including your name, the type of license you are applying for and what selling privileges the proposed license would entitle you to.
- This notice must be publicly displayed for a set amount of time (which varies by state). During this time, anyone from the local community can come forward and contest your application.
- Depending on the state or city laws, you may also be required to post an announcement of your liquor license application in the local newspaper, and in some places, reach out to local neighborhood organizations such as schools, places of worship and nearby parks.
- If there are no objections to your application, local government will proceed with reviewing your application as normal. If there are objections, you may be called forward to defend your proposal at a public hearing, before a final decision is made.
Maintaining Your Liquor License
- Renew your liquor license yearly. You will need to renew your liquor license on a yearly basis, which will involve paying a renewal fee.
- Keep in mind that if you stay in good standing with your local agency throughout the year, you may be entitled to a reduced fee.
- Be aware that your license can be revoked. Understand that your license can be revoked if you violate the terms set by your local agency.
- Common violations include selling liquor to a minor, over serving alcoholic beverages to patrons and allowing an employee to be intoxicated on the premises.
Tips
- Obtain a lawyer to help you understand your local laws and help draft proposals. Legal jargon can be confusing.
