How to get a liquor license: Steps for all states

Maybe you already have a restaurant or a food store and you’d like to boost sales by selling liquor? Perhaps you want to start an online business selling wine and spirits? Or maybe you want to launch a craft brewery that makes unusual beers? Well hold that thought. Because regardless of the reason you want to manufacture, sell or distribute liquor products, you first need a liquor license.

What is a liquor license?

A liquor license is a legal permit that allows businesses to produce, distribute, and sell alcohol, while also controlling various aspects of its sale and service. It covers important regulations such as who can purchase alcohol, the days and hours alcohol can be sold, and the types of alcohol permitted.

The license also dictates how alcohol can be served, including the containers used and the allowable quantity per sale. Additionally, it controls where alcohol can be consumed or sold to-go, and whether a business is authorized to manufacture, distribute, or sell alcohol, either separately or in combination. Lastly, liquor licenses set rules for pricing, associated fees, and any applicable quota limits.

How to apply for a liquor license

Unlike many other permits and licenses, liquor licenses have unique requirements based on the state where you operate.

1. Determine your state’s alcohol laws

Every state has their own liquor licensing laws, although initially, you’ll need to register with the federal Alcohol and Tobacco Tax and Trade Bureau (TTP). This agency can also give you further information to help you get your state and local operating licenses and permits. Usually, you’ll do this via your state’s Alcoholic Beverage Control (ABC) agency, (see point 7 below), as they set your state’s laws related to alcohol. You’ll also need to meet any relevant county or municipality liquor rules and apply for regional or local permits. Your state’s ABC should have details of these requirements.

What is a ‘dry county’?

A ‘dry county’ is a county where the sale of alcoholic beverages is prohibited by local law. In these areas, alcohol cannot be sold in stores, restaurants, or bars, although possession and consumption may still be allowed. Dry counties often reflect cultural or religious influences.

Top tip: Don’t be tempted to start manufacturing or trading alcohol without the proper licensing as that can lead to large financial penalties or even prosecution.

2. Liquor license quota states

You may have to get in line to obtain your liquor license. Some states provide an unlimited number of liquor licenses, while others impose a quota restricting the number issued. If the state limit has been met, new applicants must wait until an existing license expires before they can get their license. However, on the bright side, state laws frequently change, so it’s essential to research your state’s alcohol control board for up-to-date quota rules. Hiring legal counsel specializing in liquor laws may also be useful.

As of 2023, the following states were classified as ‘quota’ states:

Alaska
Arizona
Florida
Idaho
Kentucky
Massachusetts
Michigan
Minnesota
Montana
New Jersey
New Mexico
Ohio
Pennsylvania
South Dakota
Utah
Washington

3. Find out if your state requires a specific class of liquor license

Liquor licenses are not like driving licenses, where one size fits all. Different states may require specific liquor licenses that reflect what type of liquor you sell and where you sell it. Your state ABC can provide this granular information, but initially, you’ll need to determine if you need an on-license or off-license. On-licenses are for alcohol consumed on-site (bars, restaurants), while off-licenses are for alcohol sold for off-site consumption (liquor stores, bottle shops). Understanding these distinctions is key when applying for a license.

Other classes of specialist liquor license:

Arts licenses: For venues such as theaters and art galleries that serve alcohol during events
Beer and wine licenses: For smaller businesses that only sell beer and wine
Brewpub licenses: May be required for establishments that plan to make their own beer or wine. Depending on your state, you may be issued an alternating premises license, which requires you to make alcohol at certain times and serve it at other times
Club licenses: Allows private social clubs to serve alcohol to their members
Delivery licenses: Allow companies to deliver sealed containers of alcohol to customers – this includes online sales
Eating place licenses: For carryout businesses like delis that serve food but also sell small amounts of take-out beer.
Hotel licenses: Issued to hotels with bars and restaurants that serve alcohol
Restaurant licenses: Also known as ‘all-liquor licenses’ allowing a business to serve any kind of alcohol. However, some states do require that only around 40% of the establishment’s total earnings may come from the sale of alcohol
Retail licenses: Issued to grocery stores, convenience stores, liquor stores, and any other retail establishments that sell alcohol
Tavern licenses: Required if a business serves food but makes at least 50% of its total sales from alcohol.
Temporary liquor licenses: Required for caterers that serve liquor at events. These are also called one-day licenses

4. Preparing to file a liquor license application

To file your liquor license application you’ll need to get the necessary forms from your state’s ABC. Because the regulations vary by location, you may also want to ask these questions:

What kind of license(s) do I need?
How much will the license(s) cost?
What documents do I need to file with my license application?
Are there any available licenses in your county or town (if you live in a quota state)?
Are there any establishments in your area looking to sell their license (if you live in a quota state)?

What documents do you need to apply for a liquor license?

You’ll need to file additional documents with your license application. Commonly required documents include:

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

Top tip: 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.

You may also need to file:

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)
Details regarding your age and business experience

5. How much does a liquor license cost?

The cost of liquor licenses varies by state and the class of license you are applying for. The differences in price can be extreme. For example, in Alabama your license may cost you $100 to $1,000, but in California, liquor license costs range from $1,000 to $16,000. Your state’s ABC can tell you how much you’ll need to pay. Be aware that in some areas, you might need a liquor license for all four levels of government – federal, state, county, and local, which will incur additional costs.

6. Filing your application for a liquor license

Once you have all the required materials, you can submit your liquor license application. Most states allow you to complete this process online through their government website. The application typically requires a non-refundable processing fee ranging from $50 to $100. Additionally, you may be asked to undergo a background check or fingerprinting as part of the process.

7. Alcoholic beverage control agencies by state

Who controls the manufacture and sale of liquor in your state? The list:

How Swoop can help

Starting a business that manufactures or sells liquor can be expensive – as well as licensing costs, you’ll have a multitude of other expenses to meet. In many cases, a business loan that lets you pay over time instead of using up your valuable working capital will be your best solution. However, business loans for start-ups can be difficult to obtain – which is why working with finance experts can make all the difference when you’re seeking funding.

Contact Swoop to discuss your borrowing needs, get help with your application and to compare high-quality business loans from a choice of lenders. Give your new liquor business the best possible start. Register with Swoop today.