Learn how to get a restaurant liquor license to unlock more earning potential for your business.
Obtaining a liquor license is a key step for any restaurant that plans to serve alcoholic beverages, but the process can often be time-consuming, complex, and quite daunting.
To help mitigate the confusion, streamline the process, and set you up for success, we’ve put together this guide to help walk you through the steps of securing a restaurant liquor license. We'll offer tips on navigating regulations, help you understand the different types of licenses, and explain how to stay compliant to avoid conflict, fines, and delays.
What Is a Liquor License?
A liquor license is a permit that allows businesses to manufacture, distribute, and/or sell alcohol in their establishment. It also regulates how, when, and where alcohol can be served.
These are a few of the parameters the license will cover:
Who can purchase alcohol?
What days and hours can alcohol be sold?
What types of alcohol can be sold?
Which containers can be used to serve alcohol?
How much alcohol can be sold at one time?
Can alcohol be delivered to customers?
Is it permitted to manufacture, distribute, and/or sell alcohol in my loction?
Are there any liquor license fees?
Are there quotas?
What is the BYOB policy?
Zoning Laws
Because each municipality, county, and state has specific and varying rules regarding the distribution, sale, and consumption of alcohol, it’s important to ensure your location is zoned for the sale of alcohol before you get started.
In dry counties, for example, all sales of alcohol are forbidden by the local municipality, regardless of state laws. There are several states in the US with dry counties, including Kansas, Oklahoma, Texas, Arkansas, Mississippi, Tennessee, and Kentucky. Additionally, states like North Carolina, Ohio, Michigan, and Pennsylvania have "mixed" counties that moderate the sale of alcohol but not its on-premise consumption.
Steps for Obtaining a Restaurant Liquor License
Step One: Get to Know Your State's Alcohol Laws
Because each state has its own specific rules regarding the distribution, sale, and consumption of alcohol, the first step in filing for a liquor license is determining your state's alcohol laws. There is an Alcoholic Beverage Control (ABC) agency in each state.
This is the governing body that determines all rules related to alcohol. Many counties and municipalities set standards and requirements that accompany the general state laws.
Liquor License Quota States
While some states offer an unlimited number of liquor licenses, some set a specific liquor license quota for the number of licenses they'll issue. In the majority of states with quotas, the specific locality's population determines the number of licenses available. As an area gains more residents, the number of new licenses that can be issued increases. These quota figures vary across states.
Because state laws are always evolving, make sure to research the alcohol control board of your state. Even better, consider hiring legal counsel that specializes in liquor laws.
Step Two: Determine the Type of Liquor License Needed
On-Sale vs. Off-Sale: For restaurants, you'll need an on-sale license, allowing customers to consume alcohol on the premises.
Beer, Wine, or Full Liquor: Decide whether you want to sell only beer and wine or include spirits. Some areas issue separate licenses for each category.
Specialty Licenses: Though not all states require specific classes of licenses, some do.
Below is a list of the common types of liquor licenses:
Arts Licenses: designed for theaters and art galleries to serve alcohol during events.
Beer and Wine Licenses: for smaller businesses that only sell beer and wine.
Brewpub Licenses: for establishments that plan to make their own beer or wine.
Alternating Premises Licenses: for businesses who make alcohol, this license requires alcohol to be made at certain times and served at other times.
Club Licenses: for private social clubs who serve alcohol to their members.
Delivery Licenses: allow restaurants to deliver sealed containers of alcohol to customers.
Eating Place Licenses: given to carryout businesses like restaurants that serve food but also sell small amounts of take-out beer. These licenses usually restrict the amount of alcohol that may be sold to one customer.
Hotel Licenses: issued to hotels with bars and restaurants
Restaurant Licenses or All-liquor Licenses allow a business to serve any kind of alcohol.Some states do require that only around 40% of the establishment's total earnings may come from the sale of alcohol.
Retail Licenses: for grocery stores, convenience stores, liquor stores, and any other retail establishments that sell alcohol.
Tavern Licenses: for businesses that serve food but make at least 50% of its total sales from alcohol.
Temporary Liquor Licenses/One Day Licenses : required for caterers that serve alcohol at events.
Note: A license may also be required for BYOB establishments, although this process varies by state.
For a deeper dive into BYOB policies for restaurants, read our latest blog post, Uncorking BYOB, a Comprehensive Guide for Restaurants.
Step Three: Ensure You Meet Eligibility Requirements
Age and Residency: A licensee must typically be 21 years old and a U.S. citizen or legal resident. Some states may also require residency in the state for a certain number of years.
Criminal Background Check: A background check is usually part of the application process as those with certain criminal records (e.g., felonies) may not be eligible.
Business Entity Documentation: Make sure your business is properly registered (LLC, corporation, etc.). You may need to provide business documents like articles of incorporation or partnership agreements.
Step Four: Filing Your Application for a Liquor License
Once you've researched the liquor laws and regulations in your state and determined the type of license you need, you're ready to file your application for a liquor license. In most areas, it’s just a matter of simply visiting your state government's website and filling out the required forms. Typically, you'll also have to pay a non-refundable $50-$100 processing fee. You may be subject to fingerprinting.
Documents Needed
While the information and documentation you'll need before you file your application varies by state and locale, here are the most important documents to keep on hand:
Employer ID number from the IRS
Zoning permit from your local zoning commission
Business license from your local government
Sales tax permit from your state's website
Alcohol tax permit from your state's business taxation department
Food handler's permit (if applicable) from your state health commission
Building permit from your local zoning commission
Signage permit from your local zoning commission
Health permit from your state health commission
Music license (if you'll be playing copyrighted music) from online licensing companies
Photos of your building's exterior
A floor plan of your building's interior
A copy of your building title
Your code compliance certificate
Your certificate of incorporation
Your company constitution
Your partnership agreement (if applicable)
Step Five: Submit the Liquor License Application
Application Form: Complete the liquor license application, available through your state or local ABC board.
Application Fees: Be prepared to pay application fees, which can range from a few hundred to several thousand dollars depending on the type of license and location.
Supporting Documents: Include all necessary supporting documents, such as your business license, floor plan, and identification.
*Note: Make sure you've paid any delinquent taxes or outstanding fees before applying for your liquor license. Failure to do so can negatively impact your chances of obtaining a license.
Step Six: Public Notice and Hearings
After filing for the license, some states or cities require you to notify the public of your intention to sell alcohol. This may involve:
Posting a Public Notice: This involves posting a sign at your restaurant indicating that you’ve applied for a liquor license.
Attend Public Hearings: In some areas, you will be required to attend a public hearing where local officials or members of the community can voice any concerns.
Step Seven: Inspections and Review
Site Inspection: Next, your restaurant may need to undergo a physical inspection to ensure it complies with health, safety, and zoning regulations.
Review Period: Finally, the ABC board will review your application. This process can take from several weeks or several months, depending on the state and the complexity of the application.
Step Eight: Approval and Issuance of License
Once your application is approved, you will be issued your liquor license, which must be displayed in your restaurant. Ensure you follow all regulations associated with your license (e.g., hours of sale, minimum age for employees serving alcohol). Failure to comply can result in fines or license revocation.
Timeframe for Obtaining a Liquor License
The time it takes to get a liquor license varies depending on several factors, including the state, the type of license, and the complexity of the application.
Here's a breakdown of the typical timeline:
Typical Time Frames
30-90 days: Most common for straightforward applications with no complications.
3-6 months: In areas with more complex regulations, community involvement, or a backlog of applications.
Temporary Licenses: Event-based licenses can be issued in as little
Application Review Period
Each state has its own review process. Some states have more streamlined procedures, while others require extensive background checks, site inspections, and public hearings.
Factors Affecting Processing Time
Public Hearings or Objections: In many states, applicants must post a public notice or attend hearings, which can delay the process, especially if there is community opposition.
Background Checks: In-depth background checks on the business owners and partners can add to the processing time, particularly if there are any issues or discrepancies in the applicant’s history.
Location Zoning Approvals: If your restaurant is located in an area with zoning restrictions or near sensitive areas (e.g., schools, churches), you may need special approvals, which can add weeks or months to the process.
State Quotas: Some states or cities have a quota on the number of liquor licenses that can be issued. If no licenses are available, you may have to wait for one to become available or purchase one from an existing business, which can lengthen the process.
Expedited Licenses
Some states or localities may offer an expedited process for temporary or event-specific licenses, which can be approved in a few days to a couple of weeks. However, these licenses are usually for short-term use and not permanent licenses for ongoing alcohol sales.
Waiting for Final Approval
Once your application has passed all inspections and background checks, it may still need final approval from the local ABC board or a city council, which can add another few weeks, depending on meeting schedules and any remaining paperwork.
License Renewal
Liquor licenses typically need to be renewed annually or biennially. Renewal is usually quicker and can take a few weeks, as long as the restaurant remains in compliance with local regulations.
How Much Does a Liquor License Cost?
The cost of a liquor license is affected by variables like the state, county, and municipality of the operation, license class, and quota. In one county, a liquor license could cost hundreds of thousands of dollars, while in another, it could be as little as $125.
The best way to determine the total cost for a liquor license is to contact the state ABC agency. Keep in mind, however, that some locations require separate liquor licenses for all four levels of government, (e.g., federal, state, county, and local) which can cause fees to be substantially higher.
FAQs
Do liquor licenses need to be renewed every year?
Varying from state-to-state, liquor licenses usually need to be renewed annually or biennially, so be prepared to pay renewal fees. Maintain compliance with all laws and regulations to avoid penalties or losing your license.
Are any additional permits required?
In some states, you may need additional permits for:
Sunday Alcohol Sales
Happy Hour or Drink Specials
Outdoor Alcohol Sales
Alcohol Delivery
BYOB
Take Away
Securing a liquor license for your restaurant is a significant milestone that requires careful planning and attention to detail. By following the steps outlined above—from researching local laws and determining the type of liquor license you need to submitting a thorough application and passing necessary inspections—you can streamline the process and avoid costly delays.
Each step plays a crucial role in ensuring your restaurant operates within legal parameters while offering your guests an elevated dining experience. With diligence and patience, you’ll be well on your way to enhancing your business and boosting profits by offering alcoholic beverages to your guests.
By Eileen Strauss
