Liquor license costs range anywhere from $300 to $14,000 and can take 5-6 months to process, depending on state, county, local, and even federal licensing requirements, as well as application and processing time and fees. In New York, for example, license and filing fees total $4,552, while California new license and processing fees total $13,900.
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Below are the liquor licensing costs and license types for several example states. In an attempt to compare apples to apples, the license type is a restaurant that wants to sell beer, wine, and liquor until approximately 2 am in a major metropolitan area.
Liquor License Fees by State
|New York City Liquor License||Single establishment retail on-premises license for liquor, wine, beer, cider|
|Indiana Liquor License||Beer, wine, and liquor license|
|Ohio Liquor License||Restaurant on-premises liquor license for beer, wine, and liquor|
|California Liquor License||Restaurant liquor license for on-premises beer, wine, and liquor|
|Texas Liquor License||Restaurant on-premises beer, wine, and liquor license|
|Florida Liquor License||Restaurant beer, wine, and liquor on-premises sales|
|Chicago Liquor License||Retail on-premises liquor license|
These are only a few specific examples and may not include additional fees incurred such as local licenses required. Make sure to check your state government website to find the rates for your local area.
Now that you know how much a liquor license costs, let’s look at the 3 steps involved in getting a liquor license:
Step 1: Figure Out What License You Need For Your State
As you see below, you’ll first need to identify a number things like license type, availability, etc. To do this you’ll need to visit your state’s department of Alcohol Beverage Control (ABC), which can provide you with all of the relevant data for a liquor license. Here are a few of the popular state sites:
State Alcohol Beverage Control (ABC) Boards
|New York City|
|New York State Liquor Authority||317 Lenox Ave.|
New York, NY 10027
|Alcohol and Tobacco Commission||Indiana Government Ctr. South|
302 W. Washington St., Rm. E-114
Indianapolis, IN 46204
|Ohio Department of Commerce Division Of Liquor Control||6606 Tussing Road|
Reynoldsburg, Ohio 43068-9005
|California Department of Alcoholic Beverage Control||3927 Lennane Drive, Suite 100|
Sacramento, CA 95834
|Texas Alcoholic Beverage Commission||5806 Mesa Dr|
Austin, Texas 78731
|Florida Department of Professional Business Regulations Division of Alcoholic Beverages and Tobacco||2601 Blair Stone Road|
Tallahassee, FL 32399
|Illinois Liquor Control Commission||100 West Randolph Street|
Chicago, IL 60601
Your state’s ABC board will know exactly what is required for each business to sell liquor and be properly licensed. It will be able to tell you which license(s) you need and how much they will cost.
While license types vary significantly among states, the type of license you’ll need typically depends on your answers to the following questions:
- What kind of establishment are you? (e.g. bar, restaurant, hotel, etc)
- Does drinking happen off premises (retail) or on premises (bar, restaurant)?
- What kind of alcohol do you sell?
- Are customers bringing their own alcohol (BYOB), or will you store and serve the alcohol?
- What hours do you sell? (the later you stay open, generally the more expensive the permit)
- Will you sell on Sundays? (Some states like Ohio charge an extra fee for Sunday sales)
- Do you manufacture, distribute, or sell alcohol, or any combo of the three?
Determine Permit Availability
Many states and localities have a limited number of liquor licenses. They are already pushing their license limits and have few, if any, new liquor licenses available. You may have to check availability at the state, county, or city level depending on which state you are located in. This includes making sure the area you’re targeting is a “wet” location (alcohol sales are allowed) and not a “dry” location (alcohol sales are prohibited).
The ABC board or possibly your local county or city can give you information on availability limitations and whether or not there are any of your class of liquor licenses available. They can also explain how new requests are handled, which also varies by state. For example, California holds a lottery in some parts of the state if there are more applicants than available licenses.
You May Need to Buy From an Existing Business
Even if your county is all full and there are no new liquor licenses, there may be other ways to attain a liquor license. In many cases, other businesses in the area will be looking to sell their license. Your state’s ABC often tracks that and can inform you of those options. For instance Illinois makes contact information available for all existing licensees.
Buying an existing liquor license or a business with an existing license requires many of the same steps as if you were buying a new liquor license. You still must go through the same application process as a new liquor license. However, you can apply for a temporary permit that will allow for continued operation while your application is being processed, usually 120 days. Fees tend to be lower for a transfer than a brand new license.
You can read more here regarding buying a business in general.
Step 2: Prepare for Application Process
Regardless of whether you are getting a new license or buying one from another business, the next step is to make sure you have all your ducks in a row before you actually file your application. Properly preparing for the application process can save you months in processing time.
One of the main ways to speed up your application for a liquor license is to make sure all your general business licenses and documents are in order.
Here are some examples of the elements you should have in order before you file for your liquor license:
- Employer Identification Number – Apply at IRS.Gov
- Zoning permit – Check with your local zoning commission (contact info on state website)
- Business License (Can also be at multiple levels of government depending on what you sell) – Check with local small business commission
- Sales Tax Permit – Apply Online via your State’s Website
- Alcohol Tax Permit (sometimes included in sales tax form) – Get in-touch with your state’s business taxation department
- Food handler’s permit (if you are selling food) – Check with your state’s health commission
- Building permit – Check with your local zoning commission (contact info on state website)
- Signage permit – Check with your local zoning commision (contact info on state website)
- Health permit – Check with your State Health Commission
- Music license (if you are going to be playing copyrighted music) – Available from a variety of online companies, including License Suite.
If you do not have all of these things figured out, your liquor application will be put on hold until you do.
If you’ve been in business a while, you should also make sure you are up-to-date on all tax payments. If you are behind on your taxes, the state will not look favorably on your liquor license.
According to James Henry Dunne, Professor of Hospitality Studies, NYIT School of Management,
“During the start-up phase the application for a liquor license should be submitted as soon as is feasible, since license approval takes two to three months, or more. Also, since a fully executed lease agreement (or deed/proof of ownership of the real property where the license will be used) is also required along with your license application (along with many other requirements), start-up operators are faced with the stressful predicament of signing a lease before being approved for a license. Since this is clearly a danger, start-ups should seek concessions from the landlord, if the landlord is agreeable (reduced or free-rent during building renovations — or until license approved — or an Escape Clause providing an exit for the leaseholder if license not approved).”
Step 3: File Your Application with the ABC Board
Once you have your prep work done, it’s time to actually file your application with your state’s ABC Board. This is generally done via a mail-in form that you can print from your state government website. When we reviewed a sample of state government sites, none of them provided a way to apply online.
What to Include With Your Application
In most cases, there are additional items that need to be included with your application in addition to the government-provided forms (using Ohio’s requirements as an example):
- Processing fee – Nearly every state has a non-refundable processing fee. Some are just deposits against the license fee. Ohio charges a $50-100 processing fee depending on the type of permit you need.
- Background check forms – A background check will be performed at least on the business owner and sometimes also on the top 5 officers of a corporation and possibly even the landlord (if landlord is making a commission on alcohol sales).
- Fingerprint(s) – Some states, like Ohio for example, require fingerprints for the background check
- Signed Lease Agreement – You will need to provide a signed lease agreement of your business location and take into account the time between signing the lease agreement and the potential months before getting your liquor license
- Financial Verification Sheet – Some permits depend on how much expected alcohol income your business will have.
- Certificate of Good Standing from the Secretary of State – This is a certificate that your corporation or LLC is complying with state regulations such as taxes and corporate filings. Partnerships and sole proprietorships normally don’t have certificates of good standing, but you’ll have a Doing Business As (d/b/a) fictitious name certificate if you operate under a name that’s different from your legal name.
- Copy of food handler’s permit or license – This certifies that your food operations are in good standing with the state, county, or city.
- Other applicable licenses/forms
The Approval Process
Once you send in the your form, the approval process varies for each state. As we discuss further below, it can take 5-6 months to get your license. For reference, here is an example of what happens in Ohio once you submit your application:
- Application is logged into the system and sent to local legislative bodies and authorities in the area
- The ABC board will work with local officials to determine wet/dry status and whether or not any new licenses are available
- The ABC board works with the Ohio Bureau of Investigation to process background checks (generally looking for criminal record)
- A Division Compliance Officer will come to do a physical check of your premises, also noting what schools, churches, etc. are within 500 feet of your location (they will then be notified and have 30 days to object). If your business is not in operation or does not pass inspection you’ll need to rectify the issue, assuming you can, and then request that the compliance officer recheck your establishment.
- Public Hearing is conducted if any complaints were filed.
- If no complaints were filed or complaints were resolved, then your application should be accepted and the permit issued to you within 4-8 months.
Other Things to Know Before Applying for a Liquor License
Before heading into the licensing process there are a few things you should probably be aware of.
1. Zoning Laws for Your Business
Of course, your building has to be zoned commercially. But, there are often other restrictions as well, regarding proximity to local schools, churches, and other similar establishments.
For example, to obtain a California liquor license you need to contact a city or county zoning department to see if a zoning permit is needed. If so, you’ll need to prepare and file a zoning application locally, which includes specialized maps, research, notification of local residents of your application, and preparation of a written application. You may need a public hearing and answer any questions raised by local community groups or neighbors. Only after you’ve got the appropriate zoning permit can you apply for a California liquor license. Other states have similar processes.
2. Liquor License Availability
Liquor licenses are highly regulated and each county has license quotas, many of which are already maxed out. In Indiana, for example, 98% of residential areas are at their liquor license capacities (see Step 1 above for info on finding out your county limits).
3. BYOB Restaurants/Businesses Have to Be Licensed
Some people mistakenly believe that BYOB businesses do not require liquor licensing. That is simply false. Although there may be a different class of license since you’re not storing the liquor on premises, a license is still required because you’re serving the liquor and it’s being consumed at your location.
4. How Long it Takes to Get a Liquor License
You better be planning ahead because the liquor licensing process is not quick. Factor in at minimum a 5-6 month buffer between sending in your application and when you plan to open.
The licensing process is complicated. It is rare that you just send in your application and everything is good to go. In most cases, there are multiple correspondences back and forth requesting various documents and confirming information. It is an in-depth and ongoing process that takes time.
5. Other Details You Need to Be Prepared For
Local businesses within a certain distance of your proposed location often have the right to file an objection. You often need to be of a certain age or a U.S. citizen. For many states, liquor licenses are accompanied with very specific restrictions on when you can sell alcohol such as time of day, which days, or the required food percentage of volume that you sell in addition to alcohol.
Renewing Your License
Generally, the term or length of your liquor license is 1-3 years, but it depends on your state and local regulations. There is no automatic guarantee that your license will be renewed, particularly if you have had issues or been reported for serving to minors. But, if you have operated reputably and have not had any major complaints, then you should be able to renew your license fairly easily. Depending on your state, the renewal fee may be similar to or significantly less than your original fee. For example, in California, a new license is around $14,000, but the annual renewal fee is $876.
Bottom Line on Liquor Licensing
Getting a liquor license is a pretty extensive process, and at the end of the day, there is no guarantee you will even get a license. But, the only way to find out what you are up against is to get into the process and start digging around.
Curious to know if you need to protect your business against alcohol-related damages or injury? Click here to learn everything you need to know about liquor liability insurance.
Don’t forget to protect yourself from alcohol-related damage or injury claims with liquor liability insurance. Get started on finding the best policies and premiums with the insurance brokers at Insurance321.