Snapping up your liquor license can cost you anywhere from $50 to over $300,000, depending on the type of license and the state you’re in. But that’s a small price to pay for selling alcohol that can generate a profit margin of 75% to 80%.
As alluring as these margins are, getting your license can be a lengthy and daunting process: determining which licenses you actually need, waiting five to six months, plus putting in many hours researching and filling out paperwork. But there are ways to make the process much smoother.
We’ve collected all the information you need to determine what a liquor license costs and how you can put your best foot forward to get yours. You should walk away from this piece knowing:
The most common types of liquor licenses
The cost to sell wine, beer, and liquor on site for your state
Where to get liquor license cost information by state
Detailed costs and information for New York, Chicago, Austin, Toronto, LA, and Miami
The simple 4-step process you can follow to get your liquor license
How to renew your license
Reasons why your license might get rejected
Let’s get started.
Different Types of Liquor Licenses
The two main types of liquor licenses are on-license and off-license. Selling alcohol on site requires an on-license liquor permit, while selling alcohol off site, requires an off-license liquor permit. As a restaurant owner, you’ll likely be interested in getting an on-license.
There are also more specific liquor license classes, depending on the type of establishment and what state you’re in. To simplify your life, here are four most common types:
Beer and wine license: for restaurants that only serve beer and wine
Restaurant liquor license: for restaurants that serve beer, wine, and spirits (also known as an “all liquor license”)
Tavern Liquor License: for restaurants that offer food, but alcohol accounts for 50% of sales
Brewpub Liquor License: for establishments that make and sell beer or wine
The details, specifics, and definitions of these licenses will vary by state, so you can get more details by contacting your local Alcohol Beverage Control (ABC) Board – the board responsible for liquor laws in your state. There is a full list of the ABC agencies further along in the article, when we discuss how to get your liquor license.
Now that you have a broad understanding of the type of licenses, you’re likely wondering, “How much does a license cost in my state?”
Liquor License Cost in Your State
Below are the approximate liquor license costs by state, plus more detailed costs and license information for New York City, Chicago, Austin, Toronto, LA, and Miami. Keep in mind many of these states also require you to pay an application processing fee (state, local, or both) on top of the range listed below, which can be anywhere from $40 to $1,000.
The final cost varies depending on:
The type of license. In Delaware, for example, you pay $500 to sell beer or wine, $1,000 to sell liquor, and $2,000 to sell beer if you’re a brewery pub.
The number of licenses you need.
Whether it’s a quota state. Although each state sets specific fees, they cannot control the market price of licenses in quota states. In New Mexico, for example, the average cost of a license is $381,000.
Your local area. For example, Nevada’s fee structure differs per county – below is a liquor license cost range across Clark County and Washoe County.
Chicago has six major liquor license classes: Tavern License, Packaged Goods License, Club License, Caterer’s License and Caterers Registration Permit, and the Consumption on Premises-Incidental Activity License (COP).
The COP license is a broad license that allows you to sell liquor on site. It requires a renewal every two years. You can also get secondary and special liquor licenses if you host promotional or special events, such as Outdoor Patio/Cafe and Late Hour Liquor License (which lets you serve alcohol past 2:00 am).
Liquor license cost in Chicago
Here are the various liquor license costs, which are each good for two years only:
Tavern license: $4,400 (plus a $40 publication fee)
COP License: $4,400 (plus a $40 publication fee)
Caterer’s License: $4,400 or $2,200 if you already have a COP License (plus a $40 publication fee)
Outdoor Patio License: $1,760 (plus a $40 publication fee)
Late Hour License: $6,000 (plus a $40 publication fee)
Take note: After getting a Chicago liquor license, you’ll also need to obtain the State of Illinois License for $750.
How to apply for a liquor license in Chicago
Refer to these links for more information on getting a liquor license in Chicago and the documentation you need:
No matter what state you’re in, here are the general guidelines that will show you what to expect before, during, and after the process of applying for a liquor license.
Step 1: Come to grips with the law
Start by understanding the laws on a state and local level because these can differ widely. The two main things you’ll want to consider are if:
Your area is zoned for selling alcohol
Most states are zoned to sell alcohol, but specific areas have stricter zoning laws (like near schools or places of worship). In fact, some areas in states like Kansas, Oklahoma, Texas, Arkansas, Mississippi, Tennessee, and Kentucky, have “dry” ordinances that prevent the sale of alcohol entirely – leftovers from the prohibition era.
You live in a quota state
While many states offer unlimited licenses, some have quotas, meaning there are only a limited number. When they’re gone, they’re gone. Below are quota states:
For more information by state, consult the Alcohol Beverage Control Board in your state:
To determine the type of license(s) you need for your restaurant, make sure you know the answers to these questions:
What type of establishment are you opening? (i.e. restaurant vs. bar)
Will guests consume alcohol on or off site?
Do you want to sell all kinds of liquor, or just beer and wine?
Do you have a BYOB policy?
How late will your restaurant be open?
Which days of the week will you sell alcohol?
Will you be running an on-site brewery or winery?
Once you have a better picture of the above, approach your ABC board for further guidance on:
Type of licenses
License costs and renewal information
Requirements for filing your application (documentation, etc.)
Note: If your state has quotas, you may need to purchase an existing license from another business. If you follow this route, the process may be similar.
Step 3: Get your house in order before filing
You need to prepare all documentation and general business licenses before filing for a liquor license. If not, you may end up delaying an already long process. Here are the basics you should have ready before filing:
Also, ensure your taxes are in order and that you’ve done the necessary building inspections and upheld your building codes. Otherwise, you can expect delays.
Step 4: File your application
File your application directly with your state’s ABC board by mail (no online filing). You can get all the documentation you need to file for your liquor license directly from your state’s website.
Besides sending in the government forms, you may have to pay a processing fee and send the following documentation:
Background check forms
Signed lease agreement
Financial documents for permits that require income checks
Certificate of Good Standing from the Secretary of State to signify that your corporation or LLC is abiding by tax laws
Copy of your food handlers permit
Other specified documents
What Happens After Filing
The simple answer? You wait. Following all the correct steps helps the process go more smoothly and increases your chances of acceptance. Even still, expect to wait at least six months before you hear anything from your ABC board.
During the process, a notice of application will be posted at your restaurant indicating the business name, kind of license, and what you’re selling. Any community member can also contest your application, in which case you may have to present your case at a public hearing.
But if all goes well, you’ll get your license and be able to start selling alcohol, finally reaping those high-profit margins!
Two More Reminders
Make sure that you:
Follow the details laid out in the license to avoid losing it. Easy ways to have your liquor license taken away include:
Selling at unauthorized times
Drinking in unlicensed areas
Untrained service staff
Renew your license in the timeframe stipulated by your ABC board. This renewal usually happens anywhere from 1 to 3 years, and the fee varies by state.
While the high-profit margins more than justify a liquor license cost, the process of obtaining one can be a nightmare: complicated, time consuming, and hard to control. But, if you gather the correct information, understand your state laws, and apply for your license the right way,
you’ll rest easier knowing you’ve put your best foot forward – and before you know it, you’ll be cashing in on those high profit margins.
Silvia is the former Digital Marketing Manager for TouchBistro. During her time with TouchBistro, she managed and coordinated content for the RestoHub blog.