Operating a business that retails alcoholic beverages requires a "premise" liquor license. Retail licenses are administered by state alcohol beverage control (ABC) boards, frequently using complex fee schedules. Licenses often require other fees as well that vary according to state and municipality. Finally, the question of costs for a liquor license may include finding a business with an existing license, transfer fees and the cost of a retainer for a good small business attorney.
Retail liquor licenses are usually classified by the type of liquor that is to be sold and the type of establishment that will be selling it. A license for a corner grocery that sells only beer and wine will be priced much differently than a full-service nightclub license because of the difference in prospective volume of trade (and resulting profit). Most licenses must be renewed annually, and a processing fee is generally attached by the licensing authority that may or may not be included in the licensing fee itself.
Liquor license fees vary from under $100 to over $4,000 depending on the type and location of premise being licensed. Many states delegate the administration of licenses to municipalities or county boards, and these organizations often add fees ranging from a few to several hundred dollars to cover basic charges for permits. In most areas, only a limited number of retail licenses are available, most often based on the population of the area, and prospective retailers will buy existing businesses to assume the license. This often adds to the business seller's asking price.
Federal licenses, called "permits," are mandatory for any business producing or retailing alcohol. They are administered by the U.S. treasury through the alcohol and tobacco tax and trade bureau. Establishments that serve as retail outlets for brewers, distilleries or the popular "microbreweries" will need federal producers or wholesalers' permits for the production and wholesaling segments of their businesses...as well as state premise licenses for the retail area that serves the public. Federal permit fees are based on volume and type of alcohol produced or distributed. Retail establishments that sell alcohol to other retail establishments may need a federal distributor's permit if they do it on a regular basis.
Licensing of retail establishments is a fairly new concept, only gaining popularity after the "Great Experiment" of Prohibition. Before that, the only control placed on retail establishments was that of public popularity; people tended to avoid taverns where the ale was watered or fights broke out regularly. After 1933, the control of quality and distribution of alcohol was assigned to the federal government as part of its responsibility for interstate commerce. The control of retail establishments was given to states under their rights to regulate business and grant licenses. Current regulations are designed to protect the public from dangerous products, control the number of alcohol retail establishments and insure that the owners of establishments are honest without a criminal background.
Liquor licenses do not "come with the business." The purchaser must apply for transfer of the license and provide proof of eligibility before the licensing authority can transfer the existing license. Not too many liquor commissions play favorites or operate on the "good old boy" system. If a business owner has questions, a good small business attorney can often clarify the process, act as advocate in public hearings and encourage bureaucrats to simplify the fee structure.
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