How to Get a Liquor License + Costs

Liquor license costs start at around $300 but can grow into the tens of thousands depending on your location. Processing times range from three to 12 months. State, county, and local licensing requirements vary widely. Business owners in large markets like New York and Los Angeles frequently use license brokers or permit expeditors to navigate the application process.

Using permit expeditors is especially useful if you are starting a restaurant. If you are currently in the process of launching your restaurant, you may want to check out our free e-book “How to Start and Run Your Restaurant.” It combines the best advice from our in-house experts in finance, marketing, and hospitality. In this article, we show you how to get a liquor license in five steps.

1. Determine What Kind of Liquor License You Need

Before applying for a liquor license, you’ll need to identify exactly which types of licenses you will need. Exact requirements and prices vary slightly by state. Your state’s Alcohol Beverage Control (ABC) board can tell you what your business needs to be properly licensed. It will be able to tell you which licenses 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? For example, are you a bar, restaurant, retail store, or hotel?
• Does drinking happen off-premises or on-premises? Off-premise operations may be brick and mortar retail stores or websites that sell and ship spirits. On-premise operations are bars, restaurants, and/or catering businesses.
• What kind of alcohol do you sell? Beer, wine, cider, and liquor have different license classifications. States that permit the sale of cannabis products may also have a separate license classification for businesses that offer marijuana products along with alcohol.
• Are customers bringing their own alcohol, or will you store and serve alcohol? Bring-your-own-bottle (BYOB) operations still require licenses.
• What hours do you sell? Generally, the later you stay open, the more expensive the permit.
• Will you sell on Sundays? Some states charge an extra fee for Sunday sales.
• Do you manufacture, distribute, or sell alcohol, or any combo of the three? Breweries, wineries, and distilleries have separate licensing requirements.

Businesses that only serve beer and wine need a liquor license.
(Photo by Tatiana Rodriguez on Unsplash)

On-premise vs Off-premise Consumption

There are two main types of liquor licenses: those for on-premise consumption and others for off-premise consumption. These are sometimes referred to as on-licenses and off-licenses. On-licenses are for businesses that plan to sell alcohol for customers to drink on the property, such as bars, breweries, and restaurants. Off-licenses are for businesses that sell alcohol to-go, such as liquor stores.

Choose the Correct Class of License

Within the categories of on-premise and off-premise, licenses are further categorized by class. The class of the license determines what type of alcohol your business is permitted to serve. Some states use letters while others use numbers to describe the various license classes.

For example, a full-service restaurant that serves a full bar featuring wine, beer, and spirits in Washington, D.C., needs an “On-premises Retailer Class C/R license.” The same business in California would need a “Type 47” license. In New York City, it is an “OP 252.” Regardless of whether a state uses letters or numbers to distinguish between license classes, they tend to use the same criteria to define the various types.

Off-premise Liquor License Classes

Liquor licensing authorities categorize off-premise liquor licenses in two ways. The first distinction is between physical storefront retailers or online retailers. Both types of retail stores then have license options based on the products they offer. One kind of license permits the sale of beer, wine, and liquor, while another permits only beer and wine sales.

• Beer, wine and spirits: The license allows a store to sell spirits, beer, and wine for consumption off the licensed premises.
• Beer and wine only: This permit limits a store to sell only beer and wine that will be consumed off  the licensed premises.
• Internet sale of beer, wine and spirits: This permit is for retailers without a physical storefront to sell spirits, beer, and wine via a website.
• Internet sale of wine and beer only: This type of license allows a retailer to sell wine and beer via a website without a physical storefront.

On-premise Liquor License Classes

There are also different types of on-premise licenses designed for different kinds of establishments. On-premise license classes are much more numerous than off-premise licenses. When you consider the variety of businesses that serve alcohol on-site, this makes sense. A bed-and-breakfast that hosts a nightly wine tasting must have a liquor license but not the same one as a restaurant with a full bar.

The different types of on-premise liquor licenses are categorized by business type:

• Tavern: This license is for businesses whose primary revenue comes from alcohol sales, such as bars. Sometimes called a Nightclub License
• Private Club: This license permits members-only venues like country clubs to sell alcohol.
• Brewery: This license allows spirits makers to serve alcohol on the premises where it is manufactured.
• Restaurant: This license permits restaurants to sell any type of alcohol but limits what percentage of your revenue can come from alcohol.
• Beer and wine: This license is for businesses that wish to sell beer or wine (often to complement food) but won’t be selling hard liquor.
• Seasonal: This license is prorated for the needs of businesses that only operate seasonally, like bars and restaurants in ski resorts or summer destinations.
• Nonprofit entity: This license allows nonprofit organizations like theaters or symphonies to sell beer, wine, or cocktails for a set number of hours before, during, and after a performance.
• Special Event: These licenses enable the sale of spirits at non-traditional venues for special events, like weddings or fairs.
• BYOB: This type of permit covers businesses that allow customers to bring their own bottles of wine or beer to consume on the premises.

Some states have many more categories. Seaside towns, for example, may have specific license requirements for businesses that operate on docks or in open water. In markets where it is permitted, serving cannabis-infused items on your premises may influence the class of liquor license required. Most state’s alcoholic beverage control board websites have a questionnaire feature that will guide you to the correct license type.

2. Verify Your State’s Requirements for Liquor Licenses

Check with your state’s local ABC board to determine specific costs, availability, and processes in your area. Select your state below for the common price range for licenses in your area and the website of your state’s liquor licensing website. It is important to note that these fees are only the filing and processing fees charged by the state. Your total costs will be higher if you buy a liquor license from an existing business.

Determine Permit Availability

Many states and localities have a limited number of liquor licenses. In many cases, areas 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 your location.

The ABC board can give you information on availability limitations and confirm if a liquor license in your class is available. It can also explain how it handles new license requests, which also varies by state. For example, some California counties hold a lottery if there are more applicants than available licenses.

Purchase a Liquor License From an Existing Business

Even if there are no new liquor licenses available in your area, there may be other ways to attain a liquor license. Some locations allow businesses that are closing to sell their liquor license. Your state’s ABC often tracks this process and can inform you of those options. For instance, Illinois makes contact information available for all existing licensees.

When purchasing an existing liquor license, you may have the option of purchasing just the license or purchasing the entire restaurant. Buying an existing liquor license or a business with a current license requires many of the same steps as obtaining a new liquor license. You still must go through the same application process as you would when applying for a new liquor license. However, you can apply for a temporary permit that allows for continued operation while your application is being processed, usually 120 days.

3. Determine Liquor License Costs

The costs of liquor licenses can vary widely from place to place. Most locations charge a small filing fee of around $100 to $300 then a larger filing fee once your application is approved. In addition to state licenses, highly populated cities and counties have their own licensing requirements and fees. Los Angeles county, for example, requires that all businesses serving alcohol have what is known as a Conditional Use Permit (CUP). The fees for a CUP vary depending on your business’s hours of operation, with those operating at later hours paying more.

Below are some examples of the application fee and filing costs for several sample states. In an attempt to compare apples to apples, the license type represented below is a new license for a restaurant that wants to sell beer, wine, and liquor until approximately 2 a.m. in a major metropolitan area.

Fees for New Liquor Licenses, by State

_{* Total cost will be higher if you buy a license from an existing business. Prices for existing licenses are based on supply and demand in your area.}

Liquor License Funding Options

As you can see in the chart above, liquor licenses can be pricey. However, if you are starting a new business, applying for a liquor license will be just a fraction of your total costs. You’ll need to lease and outfit a storefront, purchase goods, hire and train your staff, and advertise your business. There are many small business funding options available, including bank loans, small business loans, and business credit cards.

4. Prepare Your Liquor License Application

Regardless of whether you are getting a new license or buying one from another business, you will need to submit a license application. The approval process can take months, and it will take even longer if your application is incomplete or contains errors. Properly preparing for the application process can save you months in processing time.

In most cases, obtaining a liquor license requires that your business already has:

• An Employer Identification Number
• Any required Zoning permit
• Business license
• Sales Tax Permit
• Alcohol Tax Permit
• Food handler’s permit (if you are selling food)
• Building permit
• Sign permit
• Health permit
• Music license (if you play copyrighted music)

Your liquor license application will be put on hold until each of these documents is secured.

If you have 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 application. You will also need to include a current lease agreement with your liquor license application.

If you’re a new business, the thought of signing a lease and securing a property before you have a liquor license may seem scary and counterintuitive, but it is a requirement. To minimize any risk, work with your landlord to put in an escape clause in the lease. This way, if you are denied a liquor license, you can cancel the lease contract.

Some locations require a music license as part of a liquor license application. (Image by Mircea Iancu from Pixabay)

5. File Your Liquor License Application With the ABC

Once you have your prep work done, it’s time to file your application with your state’s ABC Board. This usually involves downloading a form from your state government website that you either mail to the ABC board or deliver in-person.

Items to Include

Most liquor license applications require a wealth of information about your business and its owners. In addition to including copies of required permits, most liquor license applications require background checks, fingerprints, and financial records.

These items may include:

• Processing fee: Nearly every state has a non-refundable processing fee. Some are just deposits against the license fee. Ohio charges a $50 to $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.
• Fingerprint(s): Most states require fingerprints for the background check.
• Signed lease agreement: As mentioned earlier, you will need to provide a signed lease agreement of your business location.
• Financial verification sheet: Some permits depend on the total expected alcohol income your business is projected to earn.

Liquor License Approval Process

Once you send in the form with copies of permits and a set of fingerprints, the approval process varies for each state. Typically, it takes five to six months to get your license. In busy markets like Los Angeles, approval can take up to a year.

For reference, here is an example of what happens in Ohio once you submit your application:

1. The application is logged in to the system and sent to local legislative bodies and authorities.
2. The ABC board works with local officials to determine zoning restrictions and whether new licenses are available.
3. The ABC board works with the Ohio Bureau of Investigation to process background checks.
4. A Division Compliance Officer performs a physical check of your premises, noting what schools or churches are within 500 feet of your location. (they will then be notified and have 30 days to object). If your business does not pass inspection, you’ll need to correct any issues and request a re-inspection.
5. A Public Hearing is conducted if any complaints were filed.
6. If no one files a complaint or you have resolved all complaints, your application should be accepted.
7. In four to eight months, you will receive your permit.

Tools for Navigating the Process

Considering all the moving pieces involved, securing a liquor license can feel like an overwhelming process. Especially if you are launching a new restaurant, the process can be lengthy. In nearly all locations, you can find permit expediting services or liquor license brokers to help oversee your liquor license application.

These services all have affiliated costs, of course. However, if they save you administrative time or the costs of re-filing incomplete or inaccurate applications, they are absolutely worth it.

License Lookup Services

Several legal service websites offer license lookup tools. These are an incredibly cost-effective way to ensure that you have the correct information for the permit and licensing requirements in your area. Incfile, for example, offers a Business License Research package for $99. This service provides a complete list of all of the licenses and permits you need for your business, plus copies of the application forms you need to file.

A license research service is a cost-effective way to cover your bases.
(Image from Incfile)

License Brokers

Business owners in busy markets like New York and Los Angeles will find it incredibly easy to locate liquor license brokers. A liquor license broker— sometimes also called a consultant— will usually handle your entire liquor license application process from beginning to end. This is especially useful if you are purchasing a license on the open market or from an existing business.

You can find a license broker or consultant by performing an internet search for “liquor license broker” (or consultant) and your location. Another option is to ask business owners in your area for recommendations. Once you locate a broker, ask how they research available licenses. You will want to be sure that any license you buy from an existing business is free of tax or vendor liens. You may inherit those issues with your purchase.

License broker costs vary widely from location to location. Most brokers and consultants will offer you a free quote based on your business’ licensing needs.

Permit Expeditors

Permit expeditors are typically former health or building inspectors. Some, however, are business attorneys who specialize in the hospitality industry. In either form, permit expeditors are experts at navigating the permit process, and they have many contacts at city offices. Most permit expeditors prefer to handle all of the permits for a new business. However, some are willing to handle a liquor license alone, especially if it is a business-to-business transfer of an existing license.

You can find permit expeditors in your area by performing an internet search for “permit expeditor” and your location. If you have a network of local business owners, ask them for recommendations. Costs for permit expediting vary widely depending on your needs and the location. Like brokers, most expediting services will present a free quote tailored to your needs.

Obstacles to Getting a Liquor License

To apply for a liquor license, you often need to be of a certain age and a US citizen. Many states have specific restrictions on what days or hours you can sell alcohol. They may also stipulate that a particular percentage of your overall revenue comes from food sales.

Local businesses, schools, and churches within a certain distance of your proposed location will be notified of your liquor license application. Often, they have the right to file an objection. Sometimes these objections lead to a full-blown appeals process where your hours of operation or use of outdoor spaces may be limited before your license is approved.

If your application is incomplete or contains errors, it will be rejected. In many places, re-applying requires paying all of the licensing fees again. If the approving agency is a busy one, it may be a few months before you receive the rejection, in which case you will have lost time as well as money.

Renewing Your Liquor License

The term of most liquor licenses is one to three years. The times vary based on state and local regulations. There is no automatic guarantee that your license will be approved for renewal. If you have had issues with noise or served minors, your renewal request may be denied. However, if you have operated reputably and have not had any significant complaints, you should be able to renew your license easily.

Depending on your state, the renewal fee may be similar to or significantly less than your original fee. For example, in California, fees for a new license can be more than $13,000, but the annual renewal fee is $876.

Frequently Asked Questions (FAQs) About How to Get a Liquor License

How long does it take to get a liquor license?

Getting a liquor license can take as few as four months and as long as almost a year. The average time for acquiring a liquor license is five to six months. You can help ensure a speedy application process by including all of the required documents and permits within your application. If there are any missing elements, that can drag out your liquor license application process.

What are the liquor license costs?

Liquor licenses can cost as little as a few hundred dollars or over $14,000. The cost depends on your state and city. Generally speaking, licenses will be more affordable in rural areas and more expensive in competitive metro areas such as New York City and Chicago.

What is a temporary liquor permit?

A temporary liquor license, or temporary liquor permit, allows businesses to serve beer, wine, or liquor for a specific and limited period of time. Temporary liquor permits are typically valid for 90 to 180 days, depending on the state and type of permit. They are used for special events or by new businesses that want to serve alcohol before their permanent license is approved.

Do you need a liquor license to sell wine?

Yes. Any kind of restaurant, bar, or retail store needs a liquor license to sell wine, whether customers consume it on-premise or off. Some states make an exception for businesses like salons that offer a complimentary beverage to customers. In those areas, you can provide customers with up to 12 ounces of complimentary beer or wine during business hours. It is essential to check with your local Alcohol Control Board to ensure you are operating within the bounds of local laws.

Bottom Line

Getting a liquor license is an extensive process. It will take months and often require back-and-forth questioning and verifying of information. The best way to ensure a smooth process is by taking the time to check all of the application requirements for your state and city before submitting them.

A business license research service like the one offered by Incfile can help you ensure that you have all the necessary paperwork for your application and that you understand all of your local license requirements. Spending $99 in the short term can save you time, money, and the headache of having an incomplete application denied.

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