Getting a license to sell alcohol can be a long and challenging process. Each state has its own bodies that regulate the granting of licenses for the sale of alcoholic beverages. In addition, many counties and cities within a single state may have additional rules regarding the requirements and procedures to be followed to apply for this license. It is impossible to mention the laws of all states, but by reading this article, you will have a general idea of how to move in this field. Start with the first step.
Steps
Part 1 of 3: Understanding which License Type is Required
Step 1. Learn about the laws governing the administration and sale of alcohol in your state
The first thing to be aware of is that each state has its own laws and requirements regarding the licensing of alcoholic beverages. Therefore, it is advisable to contact a local authority to find out which ones govern the issuance of the license in the state where you live.
- Each state has an "Alcoholic Beverage Control (ABC) agency" which regulates the sale and administration of these beverages. Therefore, you should also contact the local office of this institution for more information.
- Some states set a quantitative limit on licensing, which sets out where alcohol can be sold in the state. Probably even the cities can foresee this limit. It is important to know if there are licenses available within your state and city - if there are none, obtaining a license can become difficult.
Step 2. Be aware of the difference between on-license and off-license
They are the two main types of licenses required for the sale of alcoholic beverages.
- The on-license is required when you intend to sell alcohol to be consumed inside the venue. Examples of shops for which this type of license is required are bars, restaurants and taverns.
- The off-license is required when the alcohol to be sold is consumed outside the premises. Examples of stores requiring this type of license are liquor and alcoholic beverages, grocery and drug stores.
Step 3. Consider the license class you need
In some states it is mandatory to apply for a specific class of license depending on the nature of the business and the variety of spirits to be sold. Some examples of the most common license classes are:
- Tavern license: it can be requested by those businesses that serve food, but which produce half of their total income from the sale of alcohol.
- Beer and wine: some small bars and restaurants are licensed to sell "light" spirits, such as beer and wine. This type of license does not entitle its holder to sell highly alcoholic beverages.
- Restaurant: this class allows the restaurateur who owns it to sell any type of alcoholic beverage within his premises. However, it can establish that only a certain percentage of the overall earnings of the business can come from the sale of alcohol. This percentage is around 40%.
Part 2 of 3: Proceed to Apply for the License
Step 1. Start well in advance
If you plan to open a bar or restaurant that serves alcohol, it is important to start the bureaucratic process for applying for a license as soon as possible.
- Licensing for alcohol takes time - in some places up to a year.
- Therefore, it should be among the first things to consider when planning the opening of a business of this kind.
Step 2. Consider the cost
The cost of obtaining a license to sell alcohol can vary enormously. In some cases, you only need to pay a few hundred dollars for application fees.
- Unfortunately, due to the quantity limit in some cities, you may need to purchase a license from an existing bar, liquor store or restaurant. When that happens, the cost could skyrocket into thousands of dollars.
- In the event that it is necessary to purchase it from a pre-existing establishment, make sure that a lawyer (preferably knowledgeable in the matter) examines the contract and answers any questions you may have.
Step 3. Write a clear description of the type of business you are going to open
As already explained above, the licenses vary depending on the type of business - for example, opening a tavern will require a different license from that required for opening a liquor store.
- Therefore, you will need to give a clear description of the type of business you intend to start within the application for the license request. It is appropriate to enter information on the possible sale of alcohol to be consumed within your premises and on the percentage of the total income that you plan to obtain from the sale of alcoholic beverages.
- You should also include information on the type of alcohol you intend to serve or sell - wine, beer, spirits, or a combination of the three. This is important because certain types of beverages (such as spirits) require a license that is different from others (such as beer).
Step 4. Fill in the necessary forms and provide the required documentation
You can get the forms to fill out from the municipality or the "ABC agency" and the "The Alcohol and Tobacco Tax and Trade Bureau". In some states, it is imperative that you submit an application to both the state and your city council or county.
- The application should contain information about your business and person. Personal details such as age, previous work experience and an unprecedented past can influence the decision-making process for granting the license.
- You will also need to attach a certain number of documents to the application which can be: a deed of incorporation, a partnership contract, a statute, a copy of the menu you intend to offer to customers, photographs or drawings of the exterior of the room and the ground floor for the internal part, a code compliance certificate certifying that the building meets the required requirements and a copy of the document belonging to the premises of the business.
Step 5. Prepare to defend your project
After submitting the application, you will be sent a notice by post at the location of the proposed business, complete with your name, the type of license you applied for and the sales rights granted by the license.
- This notice will be exposed to the public for a certain period of time (which varies by state). During this phase, any citizen can come forward and contest your request.
- Depending on the laws of the state or city, you may be required to post an advertisement relating to the application you have submitted in the local newspaper and, in some locations, to extend it to public facilities such as schools, places of worship or parks..
- If there is no objection to your application, the local government will proceed to review it as per practice. On the contrary, if it is contested, you may be called to defend your proposal in a public hearing, before the final decision is made.
Part 3 of 3: Maintain the License to Sell Alcohol
Step 1. Renew the license annually
It must be renewed every year, paying the relative renewal fee.
Keep in mind that, if you remain on excellent terms with the local ABC agency office throughout the year, you may be entitled to a reduced fee
Step 2. Be aware that the license can be revoked
It happens if you violate the conditions established by the ABC agency.
