You can’t run a bar without alcohol. And if you’re a restaurant owner, serving alcohol can be a way to attract more patrons to your eatery. And whether you’re a bar or restaurant owner, you’re going to need a liquor license to legally serve alcohol on your premises.
A liquor license is a state-issued license that permits you to serve alcohol to patrons. Each state’s laws may vary slightly, governing when you can serve drinks and how many to each customer.
So if serving alcohol is part of your business plan, you really need to do your research on how to get a liquor license. Learn what is required in your state, county, and city. While we haven’t listed out regional specifics here, we have put together some steps to get you started on applying for your license.
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Getting your liquor license in 5 steps
1. Do some research to determine federal, state, and city laws/regulations
Everyone must comply with federal regulations for liquor licenses, such as not serving anyone under the age of 21. But each state has an Alcoholic Beverage Control (ABC) that governs its state laws as well. For example, some states limit how many places you can sell alcohol; these are called “quota states.” And then there are more local laws. Some towns, for instance, don’t permit the selling of alcohol at all — not an ideal spot for you to open your bar.
You can do some research to see what your state or town requires with the Alcohol and Tobacco Bureau, and then click your state to find your local ABC agency.
One thing you might find in your research is that there are two types of liquor license: “on-license” and “off-license.” An on-license is required if you want to sell alcohol that will be consumed at your location (like if you run a bar or restaurant). An off-license is required if you want to sell alcohol that will be consumed outside your location. You need this type of license if you run a liquor store. You may need both types of license if you run something like a brewpub where you also sell your beer for people to take home.
2. Determine the total cost of obtaining a liquor license
Depending on which state you live in, the cost of a liquor license varies. Some states have processing fees, or filing fees, while others have “late hours” fees for serving past a certain time. Also the fee may vary depending on the class of license you want. For example, beer and wine are a different level than hard alcohol.
You should also budget for the ongoing fee of renewing your liquor license. Depending on your area, you have to renew your license every one to three years and pay a renewal fee.
3. Sign up to take the required classes
Depending on your state, you may be required to take classes to get a license and serve alcohol. For example, in Indiana, anyone serving alcohol must take a servers class before doing so. There are also some costs associated with the classes.
4. Apply for the liquor license and provide necessary documentation
Once you’ve done your research and budgeted out the costs, you’re finally ready to apply. Make sure you have the following documentation:
- Your employer ID number from the IRS
- A zoning permit from your local zoning commission for your bar or restaurant
- Your business license and certificate of incorporation
- Your sales tax permit
- Alcohol tax permit
- If you’re a restaurant, bring your food handlers permit (and your proposed menu)
- Building permit, building title, and signage permit
- Health permit
- Music permit
Aside from all the permits, you may also need photos of the outside of your bar or restaurant. You may also need your floor plan and a copy of the building title.
5. Ensure your license doesn’t get revoked
So you finally have your license. Now, let’s make sure all that work wasn’t for nothing and you don’t get it revoked. Here are some best practices for serving alcohol.
- Only have certified staff, who have taken the required classes, serve alcohol.
- Check the ID of every person to whom you serve alcohol, to make sure you’re not serving minors.
- Stop serving any patron who is visibly intoxicated. This is for their own safety and to preserve your license. This can also help mitigate the risk of any disorderly conduct happening on your premises, which could also cause you to lose your license.
- Don’t over-serve to begin with. Put guidelines in place for your servers, so they know how much is too much.
- Make sure people aren’t drinking in unlicensed areas.
Here are other licenses to think about when starting a restaurant or bar:
A liquor license is just one of the licenses and permits that restaurant and bar owners need to think about before opening a bar. For example, if you’re playing music (whether it’s via CD or a streaming service), you need a license. Usually there’s a blanket fee you can pay to organizations such as ASCAP that lets you play a wide variety of music.
Depending on which state you’re in, you also need a health permit to ensure your establishment is sanitary. Google your state and “building health permit” to find out. The fees may vary from $50 up to $1,000.
And if you’re selling food, you need to apply for a food handlers permit. Depending on your state, you need to take a class either in person or online to receive certification. The cost and duration of the permit varies by state as well.
This is not an exhaustive list, so we encourage you to check all state, county, and local requirements.
Learn more about licenses and permits you need for your restaurant in our guide to restaurant safety.