The production and sale of alcohol is highly regulated in the U.S. If you want to begin offering alcohol to customers, it is imperative that you follow local and state rules in order to avoid getting your business shut down. Even if you run a tiny food truck for just a few hours per day and offer cans of beer to customers, if you do not have a liquor license, you are breaking the law.
If the thought of the lucrative profits of selling beer, wine and spirits at your business is enticing, the following primer on liquor licenses will help you understand what it takes to obtain permission to sell alcoholic beverages.
Contact Your Alcoholic Beverage Control (ABC) agency
States regulate the production, distribution and sale of alcohol via beverage authorities. The first thing you should do when preparing to apply for a liquor license is to contact your state's alcoholic beverage control agency. The agency can provide you with reference materials that detail the liquor license application process, fee schedule, regulations and quotas.
Depending on where you live, your state may limit how many liquor licenses are allowed in each county. If you live in a major city, you may also be required to apply for a local liquor license.
Determine What Type of License You Need
A liquor license is not a one-size-fits-all document. There are numerous classes of liquor licenses depending on the type of business you own, the size of your establishment and your hours of operation.
For example, in Arizona, there are 19 different types of liquor licenses. Some of the licenses are for producers, wholesalers, breweries and distilleries. Common liquor license categories for consumer-facing businesses include:
- Liquor store
- Night club
- Private club
- Hotel and motel
- Tasting room
In addition, some cities require special licenses for selling alcohol from pushcarts at certain city sites such as athletic fields or tourist attractions.
If you do not have a legal background, deciphering the requirements for your specific business when you read state and local laws can be confusing. Laws may include archaic stipulations such as blue laws that date back to Colonial times or Prohibition-era restrictions. Some states have strange and weird rules that are almost comical.
In order to make sure you understand the liquor license requirements for your specific situation, hire an attorney to help you navigate the application process.
Submitting the Application
Applying for a liquor license is a multi-step process. Furthermore, if you live in a city that has additional liquor laws that you must comply with, the process can last for several months or more if you are not adequately prepared to meet all necessary requirements.
If you hire legal counsel to assist in the preparation of your application, you can reduce the chances of having things fall through the cracks, such as getting an obscure document notarized or scheduling a timely inspection with the local beverage control agency.
Attorneys with expertise in liquor laws can also help if your application is denied and you need to file an appeal.
You must also make sure that you are financially sound and have the funds to pay license and filing fees in order to sell alcohol. The financial outlay for liquor licenses varies by state and may be based on the type of establishment you run and the location of your business.
For example, in New York State, license fees for retail businesses that sell liquor range from $100 to over $1,000. If you want to open a grocery store that sells beer in any county in the state, you must pay a retail license fee of $330 plus a $100 filing fee. If you want to open a liquor store in the counties that make up New York City, the fee for your retail license fee is $4,098 and the filing fee is $200.
Be Prepared to Wait and Stay in Compliance
When you are writing your business plan and getting advice from financial advisors and attorneys, you need to make sure that you factor in the time frame it takes to receive a liquor license. Think about all of the establishments you have visited that have signs on windows telling customers that no alcohol is available due to problems with a liquor license.
If you do not want to disappoint customers that expect alcoholic drinks on the menu, plan accordingly. Otherwise, you will find yourself posting one of those embarrassing signs.
In addition, stay informed of changes in liquor laws. This is another service a good lawyer can provide to help keep you from inadvertently breaking state or local liquor laws. Your failure to remain in compliance of alcohol regulations could result in fines or having your business shuttered until you resolve issues with beverage control agencies.