Owning a bar or restaurant is no easy feat. It takes hard work and dedication to build a successful business, but there’s one thing that many owners overlook when opening their establishments: procuring a liquor license.
If you’re looking to sell alcohol in your establishment, you must get familiar with applying for one of these permits.
Liquor licenses are the permits that allow you to sell alcohol in your business. These licenses come in many forms, with different restrictions and requirements depending on your business type and location.
This post will take you step by step through the liquor license process. You first need to figure out whether you will apply for a new license (most likely) or transfer an existing appointment.
Table of Contents
What is a Liquor License?
You may need a liquor license if you own a business that sells alcohol in any form. A liquor license is a government-issued permit that allows an establishment (bar, restaurant, etc.) to sell and serve alcohol.
Liquor licenses are often required for bars, nightclubs, restaurants, and hotels. But they are also used for special events like weddings, corporate parties, and holiday celebrations.
Liquor licenses are regulated at the state level, so the requirements vary from state to state. In some states, you can get a temporary permit to sell alcohol until your permanent license is approved.
Other states require you to wait until your permanent license has been approved before opening for business. In other cases, like in New York City, there are different types of licenses depending on what you plan on doing with your business: selling beer and wine or hard alcohol like spirits.
The price for obtaining a liquor license varies widely from state to state and depends on many factors, including:
- The type of establishment — A bar or nightclub will be charged more than an upscale restaurant with table service;
- The population density of the area — Higher costs are associated with areas where there is greater competition between bars;
- The extent of competition: Prices may vary depending on your location and the number of restaurants or bars that sell liquor in your area.
- You must apply with your local government authority to obtain a liquor license. You will have to provide information about your business and demonstrate that you are qualified to operate an alcohol-serving establishment. Once approved, you’ll receive your license and be able to sell liquor legally at your venue.
Varying State Definitions (Understand Your States Laws)
The first step in getting a liquor license is understanding your state’s requirements.
Each state has its own set of rules governing the issuance of liquor licenses.
These laws can vary considerably from state to state, so you must understand your area’s laws before applying for a permit. You may also have to use it at the county level if any local regulations are in place.
Before applying for a liquor license, you’ll have to ask yourself these few questions:
- Are there any restrictions on who can apply for a liquor license? Is it only for restaurants? Can I apply for one if I want to sell alcohol at my grocery or convenience store?
- What are the fees involved in applying for a liquor license? What are the renewal fees?
- How long does it take to get approved? Are there any specific requirements that must be met before approval will be granted (e.g., what hours am I allowed to sell)?
On-license vs. Off-license
There are two types of liquor licenses: on-license and off-license. You will need an on-license if you want to sell alcohol from within your premises.
This type of license is usually called a full bar or restaurant license because it allows you to sell all alcoholic beverages directly from your business premises. Some states allow other establishments, such as clubs or hotels, to obtain on-licenses.
If you want to sell sealed bottles of wine or beer for customers to take home, you will need an off-license (or retail) license.
This license type is also known as a bottle shop or liquor store because it allows customers to purchase and transport their alcohol when they leave the store or grocery store where they bought them from.
The Different Classes of Liquor Licenses
Liquor licenses come in many different classes and vary from state to state. Here are the most common ones:
Tavern License: The most common liquor license is the Tavern License. This allows you to sell your customers beer, wine, and liquor. Tavern licenses can be used for any business, including restaurants/bars, convenience stores, grocery stores, and nightclubs. If selling alcohol is your primary source of business, this is the type of license you’ll need.
Beer and Wine License: The beer and wine license is the most common license you’ll encounter as an owner or manager of a bar or restaurant. It allows you to sell any beer or wine for on-premises consumption only. The license does not allow you to sell any other type of alcohol, such as distilled spirits or malt beverages.
Restaurant License: A restaurant liquor license allows you to sell beer, wine, and spirits at your business. It also gives you the right to serve alcoholic beverages in conjunction with a full-service restaurant, allowing customers to drink while they are having dinner or waiting for their food.
How to Get a License to Sell Alcohol
Alcohol is a controlled substance, and the government regulates the sale of alcohol. Before you can sell alcohol in your state, you will need to obtain a license or permit.
To get a license, you must meet specific requirements. First, you must be at least 21 years old to obtain a permit to sell alcohol. Second, you need to have clean criminal records.
You should also have enough money to open your business because most states require that you put up a security deposit before getting a license.
The application process varies from state to state, but some things are every day among most states:
- You must submit an application fee with your application form. The amount depends on the state where you want to apply for an alcohol license, but it can range from $300 to$450,000 depending on the type of license you need and the size of your business.
- You must include proof of your identity, such as a birth certificate or passport, when applying for an alcohol license. You may also be asked for other documents such as proof of residence or income tax returns if needed by your local government agency in charge of issuing licenses and permits.
You’ll need a restaurant license if you’re a bar or restaurant. This license authorizes the sale of alcoholic beverages for consumption on the premises by customers. There are several types of permits available for restaurants in your state.
Each type has its own set of requirements and restrictions. For example, some states require additional training courses for bartenders serving alcohol.
You must apply to the Alcoholic Beverage Control Board (ABC) to get a restaurant license. The application requires information about the business, including proof of ownership, a lease agreement, and a business plan.
The applicant must also provide a list of all employees who will be involved in selling alcohol, including their ages and criminal history checks.
The ABC looks at several factors when deciding whether to issue a restaurant license. These include:
- An application form
- A business plan or marketing plan (if applicable)
- The location of the business
- The applicant’s criminal history check
- Whether there have been
- A list of proposed employees’ names, addresses, etc.
- Proof of insurance coverage
Beer and Wine License
A beer and wine license allows the sale of beer and wine (and other non-alcoholic beverages) in a retail establishment. It will enable you to sell any beer or wine for on-premises consumption only.
The license does not allow you to sell any other type of alcohol, such as distilled spirits or malt beverages.
To obtain one of these licenses, you’ll need to submit your application at your state ABC with information about the business, including proof of ownership, a lease agreement, and a business plan.
A tavern license is the most common liquor license in the United States. It allows you to sell your customers beer, wine, and spirits.
Taverns are typically small establishments serving food, other beverages, and alcoholic drinks.
They may be restaurants, bars, or nightclubs that allow patrons to consume alcohol on site.
The state government issues tavern licenses. Business owners must also comply with local zoning laws before applying for liquor licenses; contact your city clerk’s office for more information about getting a tavern license in your area.
A brewpub license allows you to brew beer, sell it on the premises and sell food. A brewpub license is only available to those who are brewing their beer. A brewer can sell beer off-premises if they have a distributor’s license.
The first step to opening a brewpub is to apply for a license from your state’s Alcoholic Beverage Control (ABC) board. You will need to complete an application, pay a fee, and provide documentation related to your location, business plan, and financial status.
Getting a brewpub license can take several months, so it’s best to apply for it as soon as possible.
The process varies from state to state, but here are some general guidelines:
- Apply for an Alcoholic Beverage Control (ABC) license. Depending on the size of your operation, you may also need a food service license or other permits from your city or county government.
- Provide proof of ownership or control of the property where you plan to operate.
- Show evidence of financing sufficient to support the operation of your business during its first year.
- Provide proof that the proposed location has adequate parking facilities, access routes, and utilities in place before applying with the ABC Board
A club license is required by establishments that have a membership requirement (i.e., private clubs). It allows the club owner to sell alcohol to its members, but only in conjunction with their dining experience (e.g., complimentary drinks).
If you have a club license, you can sell beer and wine without having a full liquor license. You’ll still need to buy alcohol from an ABC store and pay taxes, but club licenses are easier to get than other licenses because they don’t require as much paperwork or inspections.
To apply for a club license, you’ll need to fill out an application form with information about your business, including its location and owner.
The application will also ask for basic personal information about the applicant — including their social security number — and details about any criminal convictions or past violations of state laws related to alcohol sales or consumption.
If you’re going to sell alcohol in your hotel, you need a license from the state. This is true whether you sell beer and wine in a bar or hard liquor in a private club.
The first thing to do is find out what kind of license you need:
Public premises: A public premises permit allows you to sell alcohol in any area of your hotel that is open to the public. If you have a bar with tables and chairs, that’s considered a public space. If you don’t want to allow people to sit and drink there, then it’s not a public space, and you don’t need this license.
Private club: A private club permit allows members of your remote club access to an area where they can drink alcohol on the premises.
How Do I Apply for a Liquor License?
The first step in getting a liquor license is determining your type of license. There are three types of permits: on-premises (restaurants, bars, hotels, and motels), off-premises (liquor stores), and clubs (private clubs).
You’ll also need to research your state and local government’s laws and regulations. Sometimes individual counties have additional requirements on top of state laws.
The next step is to apply for the license with your state’s Alcoholic Beverage Control Board or Liquor Control Board. These boards exist in all 50 states and are responsible for issuing permits and regulating alcohol sales.
The application process can vary by state but typically requires submitting an application fee, a copy of the business plan, and other paperwork related to the business’s legal status.
You’ll also need to provide proof of insurance if your state requires it. Your insurance company will likely require that you provide copies of your liquor license application before they can issue an insurance policy.
In addition to personal background and business information, you may be required to provide the following as a part of the application:
- Certificate of incorporation
- A partnership agreement
- Employee Identification Number
- Your proposed food menu
- A company constitution
- Photos and plans for your restaurant or bar
Unless the above application requirements are met, you may not be able to obtain a license from your local government. In this case, you can try and purchase a permit from elsewhere, such as a recently closed business. Either way, you should be looking at paying between $300 to $400,000 for a liquor license.
How Much Does a Liquor License Cost?
Liquor licenses cost money and take time to acquire. The exact costs depend on several factors, including where you live and the type of license you need. In some areas, more than one license may be required for each business, which can add to the price tag.
The cost of acquiring a liquor license depends on several factors:
Location: Licenses are not equally expensive across the board. For example, if you want to open a bar in New York City, expect to pay far more than if you tried to open one in South Dakota.
Type of license: There’s more than one type of liquor license available in most states. Some types cost more than others because they allow businesses to sell more types of alcohol at different times of day or night.
Restrictions: Not all licenses are created equal — some have rules by state law or local ordinance.
That said, the cost of getting a liquor license is between $300 and $450,000.