The Process of Buying a Liquor License in the United States

 

In many cases in the United States, the cost of buying a liquor license will vary from state to state. The price can range from approximately $300 to nearly $20,000; in some states, you might even have to shell out upwards of $1 million. If you’re thinking of obtaining a license or have already decided to buy a liquor license, it’s important to budget both the right amount of time and money. Buying a liquor license can take up to five to six months and will have varying fees. Your fees will be different depending on what kind of business you have. For example, if you own a restaurant in Los Angeles, California, and wish to sell beer and  wine but not hard liquor, you would pay a processing fee of $100 and $13,800 for the actual liquor license.

 

You might also be required to pay local fees on top of state fees, which you can find by visiting your state government website’s Department of Alcohol and Beverage Control (ABC) section to find specific liquor license rates for where you live. It’s also important to understand that you may not be able to buy a liquor license directly from your state or city, because there is a limited number of available licenses that can be legally issued based on per capita quotas. In many cases, you might have to buy a license from an existing liquor license holder.

 

The most difficult part of buying a liquor license is often finding a liquor license for sale. If you don’t have any experience with finding available licenses, it’s best to consult a professional, so if you’re on our site, you’ve come to the right place!

 

After you’ve found out how much it will cost to buy a liquor license in your state, there are several important steps to follow.

 

Steps to Take in Order to Buy a Liquor License

 

Find out what type of liquor license you need to buy.

You can do this by visiting your state’s ABC, which will explain the specific license you need and the specific costs associated with it. The type of liquor license you’ll need to buy will depend on what kind of establishment you own (e.g. bar, restaurant, hotel, etc), what kind of alcohol you want to sell, during what hours you want to sell beer, wine, and liquor, and if you are manufacturing and distributing alcohol, all of the above, or simply selling it.

 

Prepare everything that you’ll need to apply to buy a liquor license beforehand.

The most important part of buying a liquor license is to be completely prepared before you send the actual application in. That means not only should you have done all of the research, know key terms and aspects like tax liens and state specifications, but you should have all of your documents ready and in order. Among other things you’ll need, you should absolutely have your:

• Business license

• Sales tax permit

• Zoning permit

• Alcohol tax permit

• Health permit

• Building permit

• Signage permit

• Employer Identification Number (check with the IRS)

 

It’s extremely important to have all of this prepared before filing for a liquor license, because your liquor license application may be put on hold if you don’t have the proper materials and information. If you are a qualified buyer and have all of your materials properly prepared and sent with your application, the process should be fairly smooth.

 

File your application to buy a liquor license.

Once you have done all the research and prepared everything that you need to purchase a liquor license, you’re ready to file a liquor license application with your state’s ABC. The simplest way to file is via e-mail. Your state government’s website will have all of the official forms you need to download in order to apply. Additionally, you’ll need to supply and file:

• Background check forms (some states might require fingerprints)

• A Certificate of Good Standing from the Secretary of State

• A Signed Lease Agreement to confirm the location of your business

• Financial verification sheets to prove that you’re in good tax standing

• Any potential processing fees required by your state

As long as no complaints have been filed against your business and you are in compliance, the process should be simple and straightforward. However, it can take five to six months before the liquor license is in your hands, so don’t forget to factor in that waiting time.

 

Other Questions to Consider When You’re Buying a Liquor License

 

What kind of liquor license do I need to apply for?

There are many types of liquor licenses that exist, so it’s important to know which one you need to acquire for your specific business or establishment before applying for one. What are the different classes of liquor licenses?

 

• Arts licenses (e.g. theaters, galleries)

• Beer and wine licenses (e.g. for smaller businesses only planning to sell beer and wine)

• Brewpub licenses (e.g. for establishments that want to brew their own liquor)

• Club licenses (e.g. for private social clubs that wish to serve alcohol to members only)

• Delivery licenses (e.g. for business that plan to deliver alcohol to customers)

• Eating place licenses (e.g. establishments or businesses that primarily serve food but also wish to sell small amount of alcohol, or take-out beer)

• Hotel licenses (e.g. for hotels with bars and/or restaurants that wish to serve alcohol)

• Restaurant licenses or all-liquor licenses (e.g. for a restaurant that wishes to be able to sell all types of alcohol including beer, wine, and liquor)

• Retail licenses (e.g. for grocery stores, convenience stores, liquor stores, and all retail establishments that wish to sell alcohol in closed containers)

• Tavern licenses (e.g. businesses that serve substantial food but make 50% or more of their profits from selling alcohol)

 

What are the risks of buying a liquor license?

As with any kind of responsibility, there are risks and liabilities that come with obtaining a liquor license. Once you own a liquor license, you have an elevated legal duty to the public and to the patrons of your establishment to serve beer, wine, and liquor responsibly. That also means that criminal and civil actions can be taken against you, and your business may be held responsible for any of your patrons who cause damage to themselves or others. Those who hold a liquor license, or buy and sell liquor, may also face administrative liability penalties such as fines, suspension of a liquor license, or even a full revocation of the liquor license if the establishment fails to comply with government regulations associated with the issuance of the specific liquor license. This is one reason that it’s important to safeguard your establishment with protective and preventive measures before applying for and buying a liquor license.

 

Making sure that you put comprehensive policies in place for training and supervising employees, as well as inventory control, will help to minimize any risks or liabilities associated with owning a liquor license.

 

How soon should I start the process of buying a liquor license before opening my business?

Because the time that it takes to obtain a liquor license will vary in many cases, depending on your city, state, or specific business circumstances, it’s wise to begin the process of buying a liquor license as soon as possible. It may take between five to six months to obtain a liquor license, and potentially longer if there are complications. The process of obtaining a liquor license often requires lots of back-and-forth, and is more complex than simply requesting and purchasing it; this is also why having a liquor license broker can make your process easier. The safest bet is to apply for a liquor license well in advance of the time period that you’re planning to open your business or begin serving beer, wine, or liquor.

 

What should I do while my liquor license is pending?

Depending on what kind of business you operate and what type of liquor license you’ve applied for, you may be required to post a public notice of a pending liquor license if your business is already open. Other than that, you should wait patiently for the process to wrap up, and avoid selling any form of alcohol until you’ve officially bought and have been granted your liquor license.

 

How long is a liquor license valid for?

The term of a liquor license is generally between one to three years, but the amount of time that your liquor license will be valid for will also depend on local and/or state regulations. Once you obtain a liquor license and note the date when it will no longer be valid, it’s important to plan ahead for when you will need to renew it.

However, obtaining a liquor license once does not necessarily mean that you will be able to automatically renew your liquor license. If you operate your business responsibly, avoid selling beer, wine, or liquor to minors, and operate within regulations, you should be able to renew your liquor license relatively easily.

 

Can my liquor license be revoked?

Yes, your liquor license can be revoked. If a claim is filed against your establishment for any reason, including employee or patron misconduct, your business may lose its liquor license.

Situations that may cause your liquor license to be revoked:

• Selling liquor at an unauthorized time

• Allowing guests to drink in unlicensed areas of an establishment or outside the bounds of an establishment

• Employing untrained service staff without the proper authorization to sell or serve liquor

• Over-serving someone who is inebriated

• Patrons of your establishment participating in disorderly conduct

• Serving beer, wine, or liquor to underage customers

 

Can I buy a liquor license from another business going out of business?

It is possible to buy a liquor license from another establishment that is going out of business. In many cases, this may be the only way to obtain a liquor license, given the limited number of licenses that each state can issue to begin with. Many business may actually be looking to sell their existing liquor license. The process of buying a liquor license from an already existing business is similar to the process of buying one directly from your state’s ABC , especially because you must still submit an application.

However, it may often be cheaper to buy a liquor license from an existing business than if you were to buy a brand new liquor license. If you want to find a business that is looking to sell its liquor license in order to begin a license transfer process, you can check your state’s ABC Board and work with a license brokerage like ours to ensure you get the best price during the sale and that you don’t run into further bureaucratic issues.

 

Can I sell beer, wine, or liquor without a liquor license?

It is illegal to sell beer, wine, or liquor without a liquor license in the United States. Selling any form of alcohol without a liquor license is putting both yourself and your establishment at risk, and is punishable with hefty fines, in addition to time in jail. Even if you have submitted an application to obtain a liquor license, and are in the process of buying one but have not yet been granted a liquor license, it is not advisable to sell beer, wine, or liquor. Selling any form of alcohol without holding a liquor license, even if you have a pending liquor license, will most likely disqualify you from obtaining one in the future.

 

Do I still need to buy a liquor license if my business or restaurant is BYOB?

In many cases, people assume that operating a business as a BYOB establishment means that it’s possible to avoid applying for or obtaining a liquor license. However, that is false. Although the type of liquor license that you must buy will be different because you will not be buying, storing, or selling your own liquor, it is still mandatory to obtain a liquor license if you wish for patrons to legally consume alcohol on premises.

 

Why does it take so long to buy a liquor license?

The process of obtaining a liquor license may go smoothly if you’ve properly prepared all of the necessary documents and have acquired the money that you need ahead of time. However, it’s always possible for complications to arise during the process of trying to buy a liquor license. It may take a longer amount of time to buy a liquor license if you do not have all of your documents, if it takes more time to verify your documents or eligibility, or if you have been convicted of a felony. Sometimes, there are simply many establishments that have pending liquor licenses simultaneously, and the state’s ABC needs time to get through all of them.

 

How do I renew my license if I already have a liquor license?

If you have already applied for and purchased a liquor license previously, the process should be fairly simple when you want to renew your liquor license. Similar to the process of buying a liquor license the first time, the application process will vary depending on your state and the kind of establishment you own. You should receive a notice from your state at least a month before your liquor license expires, prompting you to begin the renewal process if you haven’t already. Renewing a liquor license will require the same forms, and fees will vary by state.

How Long Does It Take to Get a Liquor License?

 

The process of applying for and obtaining a liquor license for your bar or restaurant varies from 90 days to five or six months, depending on your state. The timing is dependent on a variety of factors including but not limited to:

 

• Additional licensing requirements as determined by state laws (such as zoning permits)

• Liquor license availability in your state

• Failure to supply necessary documentation upon time of application submission

• Objections towards your liquor license from local community members

• Existing felony convictions regarding license applicant(s)

 

In some states, it is even required by law that any business looking to acquire a liquor license cannot be granted the license for a minimum of thirty days after filing, regardless of how prepared you are and how quickly your liquor license application is processed.

 

The best way to ensure that you are as prepared as possible for the liquor license application process is to research which class of liquor license you will need, as well as liquor license availability in your area. If your state has a license quota and it has been reached, then you may not be able to receive your license right away, or may have to purchase it from an existing vendor of beer, wine, and/or hard liquors in your area.

 

Licenses available for purchase include beer and wine licenses,  retail licenses, restaurant licenses, otherwise known as “all-liquor licenses,” and more.  

 

Some towns and cities may be “dry” or “zoned,” and thus prohibit the selling of alcoholic beverages of any kind. Be sure that the location of your business does not fall under that category.

 

The Process of Acquiring a Liquor License

 

Understanding your local government’s role in the distribution of liquor licences, as well as being able to identify the liquor license authority in your state/county who will be reviewing your application and proposal, will contribute to a potentially shorter wait as a license recipient.

 

Reviewing liquor license availability in your area.

 

Each state in the U.S. has its own Department of Alcoholic Beverage Control (ABC), which you can consult with to determine local liquor license availability. Depending upon a state’s population, only a set amount of liquor licenses may be issued per capita. Visiting or getting in contact with the ABC in your state will give you a clear idea of how many licenses—and which types—are available for purchase at the time of your application submission.

 

If your area has already reached its license quota or is near that threshold, you may find yourself paying a larger sum of money to obtain that harder-to-get license. In states without quotas, a liquor license can cost a few hundred dollars, but in states with more strict liquor laws—such as Utah, which only allows one new liquor license per 5,000 residents—a liquor license could run into the thousands or even top $1 million.

 

You may also find yourself in need of a liquor license broker in order to purchase a restaurant license, beer and wine license, or tavern license from another business that already owns the class of license you need.

 

How to search for and acquire a liquor license.

 

Once you are well-informed about your license class, availability, and local laws regarding alcoholic beverages, it is time to determine the best way to acquire your liquor license.

 

Generally, applying for a quota or new license is more expensive than obtaining an application in a state with more lax liquor laws, or an application for the transfer of a pre-existing license. Bars, restaurants, and liquor stores in your area could be good businesses to purchase a license from.

 

Your state’s ABC likely also has resources regarding available licenses for sale, and can assist you in connecting with the appropriate vendor. Liquor License Advisor can help guide your choices as well, keeping in mind the alcoholic beverage and sales market in your village, town, city or county.

 

The process of applying for an existing license requires much of same documentation as the application for a new liquor license. Documentation you may be asked to provide in your state include:

 

• Alcohol tax permit or sales tax form

• Business License

• Certificate of incorporation

• Employee Identification Number

• Health permit

• Zoning permit

 

Most license applications also require a detailed description of the type of business you own. Writing and reviewing this information will also better inform your specific liquor license needs.

 

Making an offer on an existing liquor license.

 

When your state has reached its liquor license quota, is it likely that you will need to get in contact with a business in your town that already owns the license you need. In this case, you will either need to match the asking price of that business for a transferral of their license, or need to make an offer on the liquor license.

 

Your geographical location, as well as the competitiveness of your town or county’s liquor vending, will likely affect both the vendor’s asking price and your offering price. States reaching their quota, or states that have multiple transferrable liquor licenses available, may have more expensive rates. License transfers can cost anywhere from  $2,500 to $250,000. Liquor license advisors can offer guidance on how to best obtain an alcoholic license from another business.

 

Understanding your state’s ABC  local liquor license authority.

 

The structure of liquor license authority in the United States differs by individual state. Each state has its own Department of Alcoholic Beverage Control (ABC), which regulates beverage sales. A state’s ABC has jurisdiction over regional sales, importing, and manufacturing of alcohol; this includes withholding licensing where necessary.

 

Your state is legally entitled to regulate alcohol sale. For some states, these local laws are even more so restrictive than what is expected on a federal level. Even so, is it expected that in order to successfully close a liquor license you abide by both local liquor license authority and state laws.

 

In addition to following expectations of your state’s ABC, in some regions liquor licenses are granted by both a city and that city’s state licensing authorities. Some city councils have appointed boards just for the monitoring and reviewing of liquor license applications.

 

These governing bodies may be part of a city or state’s:

• Licensing Department

• Department of Commerce

• Department of Revenue

 

You will be expected to abide by local liquor laws, in addition to both the standard national and state regulations. Keep everyone happy, and your customers will be happy too.

 

How to receive liquor license state approval.

 

Many states see ownership of a liquor license as a privilege, not a right. Once you have completed your application and submitted all necessary documentation and information regarding your liquor license application, it is then up for review by the state’s ABC and the local committee.

 

In addition to review by the committee, some communities offer an opportunity for other institutions—such as schools or places of worship—to submit an objection or protest to your application if they feel that it is not appropriate for you to hold a liquor license. Other considerations such as felonies and criminal records of applicants are also held under consideration and can affect the state approval of a licence.

 

Once your application has been processed and barring any objections, the local committee will likely request a background check for all persons involved with your application. In addition, your business may be required to inform local authorities and governing bodies of this submission, and you will need to prominently display in a storefront window notice that you have applied for a liquor license. Needs for notice include if the building your business is located in has yet to have obtained a liquor license.

 

Following the announcement of your application, you may be asked to host an inspection at the address of your bar, restaurant, or liquor store, as to ensure that your business functions in compliance with the information you have supplied in your application. Furthermore, you maybe asked to present and prove your case of license issuance to local liquor license authority.  

 

On average, local liquor license authority will take five to six months to respond to your application request with a confirmation or rejection. If within this time you pass the aforementioned inspection and your application is in order, state liquor license authority will grant a temporary liquor license.

 

Issuance and closing of your liquor license.

 

Once your liquor license application has been reviewed and processed, it can take between three months to one year for your business to receive its official liquor license, depending upon your ability to address local legislative needs and supply the necessary documentation and background checks for the class of liquor license for which you’ve applied.

 

Provisions to a liquor license might include the times at which you may be able to sell alcohol. Weekends, federal holidays, and daylights saving time may be included as days under which the jurisdiction of your liquor license would not fall.

 

If all goes as expected, you will be supplied with a “Closing Form for New License or License Sale” document by your state, which will verify that all the information you supplied in your application process is true and accurate and acknowledge that you are the individual(s) purchasing said liquor license.

 

Your license may be revoked if after receiving a business liquor license of any class, business behavior fails to comply with federal, state, and local law. Keep everything above board and the drinks will keep flowing!