Liquor licenses are state-issued licenses that enable your business to legally sell alcohol. The laws around liquor licenses vary by state but how to get a liquor license will follow the same three steps: contact your state’s Alcoholic Beverage Control Board, prepare your application, and file your application. We’ll walk you through each step below.
Before you get too far into the process, remember that many states require you to carry liquor liability insurance if you’re selling alcohol on the premises. Make sure you’ve factored the cost of insurance into your budget. CoverWallet will provide you with free quotes from multiple insurance companies with no commitment to buy.
Also, many top bar POS systems closely track your liquor inventory and sales which makes the reporting process easier, plus helps you manage many other facets of your business.
Key Things to Know Before Applying for a Liquor License
Before we get too far in, there are several important things to know upfront:
Liquor License Cost: $300-$3000 (Ballpark Estimate)
To begin, let’s talk about cost. The problem is that there is no way to truly nail down what it might cost to get a liquor license for a specific business, because each state, county, and even locale can have very different licensing requirements, each with their own application and processing fees. In some states, you may have a different license required at all four levels of government –Federal, State, County, and Local.
Not only that, but the licensing requirements and cost can vary significantly based on a variety of factors, including:
- What kind of establishment you are (bar, restaurant, hotel, etc)
- Whether drinking will happen off premises (retail) or on premises (bar, restaurant)
- What kind of alcohol you sell (there may be a variety of licenses required depending on the type of alcohol sold)
- What hours you sell (the later you stay open, generally the more expensive the permit)
- Whether or not you sell on Sundays (Some states like Ohio charge an extra fee for Sunday sales)
- Whether you manufacture, distribute, or sell alcohol or any combo of the three
Ohio – Restaurant
For example, in Ohio, if you just want to sell just beer at your restaurant during normal business hours, Monday through Saturday (as long as it is no later than 1am), your license will cost around $500, $400 for the license and $100 for the processing fee. If you want to sell other higher proof alcohols and mixed drinks, then it is closer to $900. If, you want to stay open and sell beer and other higher proof alcohols until 2:30 am, then it will cost you nearly $2,500. If you want to sell on Sundays, tack on another $500.
New York – Restaurant Brewery
Of course, geography within a state can have a huge effect as well. In New York for example, it is around $2,800 in most parts of the state to have a restaurant brewery license, where you both manufacture and sell alcohol. But in New York, Kings, Bronx, and Queens counties, it is a whopping $5,900, nearly $3,000 more.
In other words, it is nearly impossible to get a truly accurate figure without doing in-depth research into what your state and county require.
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. (See Step 2 below for more info)
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 below for info on finding out your county limits).
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, one is still required.
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 various information. It is an in-depth and ongoing process.
Depending on how your lease arrangement is configured and other factors, the state may require background checks from your landlord and other parties. Also, local businesses within a certain distance of your proposed location often have the right to file an objection (see more below under step 3).
Licensing Process Resources
If all of this sounds overwhelming, there are resources that can help. See the resource section below for more info.
Don’t forget, serving liquor on your premises will open you up to additional liability and many states require that you carry liquor liability insurance. CoverWallet can provide you with free quotes from multiple insurance companies with no commitment to buy.
How to Get a Liquor License in 3 Steps
Now that you know the basics, here’s how to get a liquor license in 3 steps:
1. Contact Your State’s Alcoholic Beverage Control Board
So, now you have a general idea of what you are getting into. If you are ready to get started on the licensing process, the first thing to do is get in-touch with your state’s Alcohol Beverage Control board, also known as ABC. They are the best first point of contact and will be able to help you figure out the following:
Type of License and Cost
The whole point of your state’s ABC board, is to know exactly what is required for each business to sell liquor and be properly licensed. They will be able to tell you which licenses you need and how much they will cost.
Many counties are already pushing their license limits and have few, if any, new liquor licenses available.The ABC board will be able to give you the skinny on your county limitations and whether or not there are any of your class of liquor licenses available.
Existing Businesses Selling Liquor Licenses
Even if your county is all full up and there are no new liquor licenses, it does not mean you cannot get a license. In many cases, some businesses in the area will be looking to sell their license. Your state’s ABC often has a pretty good pulse on who that would be.
Check out the Alcohol and Tobacco Tax and Trade Bureau site. You will be able to find your state’s ABC website and phone number there so you can get started.
2. Prepare Your Liquor License Application
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. If you are not prepared, the whole process can take months longer.
Here’s what you need to do:
Make sure all your other business licenses and permits are good to go
When talking with David Singer and Alan Ruttenberg of BusinessLicenses.com, an agency that aids small businesses in licensing processes of all kinds, they identified the main licensing issue they encountered with small business clients, was just a lack of overall preparedness. They explained that if your general business licenses and documents are not in order, it will take months longer to get your liquor license.
Here are some examples of the things you should have figured out before you get ready to 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 is going to be put on hold until you do.
Make sure you have paid any delinquent tax you might owe
If you have been in business awhile, make sure you are up-to-date on all your tax payments. If you are behind on your taxes, the state will not look favorably on your liquor license.
3. File Your Application for a Liquor License
Once you have your prep work done, it is time to file. This is generally done via a mail-in form of some kind that you can print off of your state government website. But, in most cases, there are other things that need to be included (using Ohio’s requirements as an example):
- $50-$100 processing fee – Nearly every state has a non-refundable processing fee
- Background check forms – Depending on the state, this varies, but generally at least for business owner and sometimes also required for top 5 officers of a corporation and possibly even landlord (if landlord is making a commission on alcohol sales).
- Fingerprint(s) – Some states, like Ohio for example, require fingerprints for the background check
- Lease Agreement
- Financial Verification Sheet – Some permits depend on how much expected alcohol income your business will have.
- Certificate from Secretary of State – Good standing, continued existence, organization, or fictitious name (depending on your corporation type)
- Copy of Food Service Operator or Food Establishment License
- Other applicable licenses/forms
The Approval Process
Once you get your form sent in, the approval process varies for each state. But, for reference, here is an example of what it looks like in Ohio.
- Application is logged into the system and sent to local legislative bodies and authorities in your area
- The ABC board will work with local officials to determine wet/dry county 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 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, then a later check will be done as well.
- 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 issued to you within 4-8 months.
Selling liquor on your premises opens your business up to additional liability. Make sure you’re covered with the right insurance. CoverWallet will provide you with quotes from multiple insurance companies in minutes with no obligation to buy.
Renewing Your License
The term or length of your liquor license depends on your state and local regulations. Generally, terms are 1-3 years. There is no automatic guarantee that your license will be renewed, especially 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 for a fee similar or sometimes less than your original fee.
Helpful Liquor Licensing Resources
As you can tell, getting your liquor license can be quite the daunting process. If this all sounds overwhelming, don’t worry, you don’t have to go through the process alone.
License Suite is a great resource for all your business licensing needs. I have actually talked with David Singer and Alan Rutenberg, veterans in the research/filing and marketing departments of License Suite, personally about the licensing process and challenges facing small businesses. Their input is reflected in many parts of this article.
When talking with David and Alan, they explained that many business owners start with an advice report. Once they know what licenses they need, they can pick and choose which (if any) filings they want License Suite to handle and which they will just file themselves. Of course, some filings are easy and do not require much professional guidance. But others, like liquor licenses, can get super complicated and can be much more manageable with professional help.
Bottom Line: Getting a Liquor License Is Involved
All in all, getting a liquor license is a pretty involved process. 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.
An important part of the process is to make sure your business is protecting itself from the additional liability associated with selling liquor. To make sure you are getting the right coverage at the best price visit CoverWallet. Fill out a short online form and they will provide you with quotes from multiple insurance companies with no obligation to buy.