Liquor License Common Terms

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 What Are Liquor Licenses?

A liquor license allows a business to sell or serve alcoholic beverages in a specific state. Liquor laws are strictly regulated by federal, state, and even local governments. Among these licenses are:

  • The cost of beverages;
  • Where alcohol can be sold;
  • How much alcohol can be sold;
  • Who can buy alcohol; and
  • When alcohol can be served.

How Do I Get a Liquor License?

Liquor licenses are very time-consuming and complicated to obtain. The application itself can be expensive, depending on where you are opening your business. Additionally, towns and cities often limit the number of establishments that can use these licenses simultaneously. Quotas are used in this situation.

You must submit an application to your city’s government to obtain a liquor license. Public meetings are typically held to review it. In this town meeting, citizens have the right to express their opinions and discuss the application with the town council.

After the local government approves the application, the state reviews it. If the state government approves your application, your restaurant or business will receive a liquor license.

Why Wasn’t a Business Approved For a Liquor License?

Business license applications are not always approved. In particular, liquor licenses are highly regulated because of the strict laws surrounding alcohol. It can be rejected if a jurisdiction meets a quota for businesses that can sell alcohol.

Several local and state officials review each application; if one item is out of place, it could negatively impact the application. For example, obtaining a license is less likely if a business has unpaid taxes or fees. It could seriously delay the process of being awarded one.

Are There Different Types of Liquor Licenses?

Since every state has its own liquor laws, every state requires a different license. Standard “liquor licenses” are accepted in some areas. Depending on the state, this can include all types of alcohol sales. An alcohol license will typically distinguish whether a business can sell alcohol on-premises or off-premises.

Liquor sales can often be separated from other alcohol sales in cities. Rather than a liquor license, a restaurant that only serves beer and wine may need a Beer and Wine License. Liquor licenses vary from state to state, depending on the nature of the business. Companies that deliver alcohol, clubs, hotels, and restaurants may also have their own particular license category.

Bars and restaurants often refer to liquor licenses when discussing their operations. Retail stores that sell alcohol, such as liquor stores, supermarkets, and convenience stores, are also subject to liquor licenses.

What Are Some Common Terms Used in Liquor Licenses?

Many new businesses require a liquor license to operate. Most liquor license applications contain similar terms.

Some of the most common are listed below:

  • Type of business/manner of selling alcohol: Depending on what type of business you are starting, the rules and application process may differ significantly. Getting a liquor license for a restaurant might require a different application than one for a nightclub, for example. Use the right application for the type of business you are starting.
  • Personal information: Your name, age, business description, location, and citizenship status will be required. The process of obtaining a liquor license is very rigid, so you will need to provide other personal information, such as your criminal history (note: a criminal record may not prevent you from getting a liquor license), tax information, fingerprints, and floor plans. Additional information may also be needed.
  • Fees: Liquor licenses can be very expensive. Many applications require an application fee, an annual fee, a processing fee, a late fee, etc. There are differences in fees between states and the type of business you run.
  • Renewal: Liquor licenses expire like other licenses. You must renew your liquor license (and maybe your business) on time to maintain your license. Keep track of when renewals are due. Renewing a license is easy but extremely difficult if you miss the renewal deadline.

What Types of Restrictions Are Common in Liquor Licenses?

The types of restrictions placed on liquor licenses vary widely from state to state, but even if you obtain a license, there are usually numerous restrictions. Liquor licenses may allow you to sell liquor only within certain business areas. It is illegal to sell to minors. Liquor license terms prohibit violating restrictions.

What Are Dram Shop Act Laws?

Dram Shop laws allow all injured people to file lawsuits against the business (or its owners) that served the alcohol to the intoxicated person. Liquor licenses come with a duty not to provide alcohol in excess or to intoxicated people.

Business owners should find out if such laws exist in their area. Some liquor licenses or insurance companies may require you and your employees to attend training programs.

What Are Zoning Laws, and How Do they Apply to Liquor Licenses?

Almost all local governments do zoning of the land. It is important to know the proposed location of your business before applying for a liquor license since a location in the wrong “zone” may result in your application being denied. Businesses in “wet zones” can apply for liquor licenses, while businesses in “dry zones” cannot.

What Happens If I Violate Liquor Laws?

A liquor license comes with a list of regulations and laws to which a business must adhere. When a business acquires a liquor license, it must maintain and renew it regularly. The loss of a business or even jail time can result from selling alcohol without a valid license. A business may have to pay additional fees when renewing a license.

Liquor laws may be violated in the following ways:

  • Selling a type of alcohol that is not included in the license;
  • Selling alcohol to an underage person;
  • Bartenders over serving customers;
  • Allowing open containers to leave the premise;
  • Allowing employees to drink excessively after their shift.

If a business violates the liquor license terms, it will be accused. The document informs the business owner of the laws that were violated. According to this document, the owner must attend a hearing with the state’s alcohol controlling agent. The judge will determine if any disciplinary action is necessary based on whether the license terms were violated.

If a judge finds that a business violated the license terms, they may impose a series of consequences. A business’s liquor license can be revoked if a violation is found. This can be permanent in some cases. The license of a restaurant that sells alcohol to anyone under the age of 21 is usually revoked.

It is not always the case, however. Upon meeting certain conditions, the license may be restored to the business. A judge may also impose fines and fees as part of the disciplinary action.

Should I Get a Lawyer to Negotiate or Review the Terms of the Liquor License?

Due to the strict regulations that govern liquor licenses, many of the terms in such agreements can be very confusing. These may require the assistance of a lawyer to avoid any mistakes or violations being made, which can lead to legal consequences.

An experienced business attorney in your area can help guide you through any problems or questions you might have regarding the terms of your license. You can violate the terms accidentally if you do not understand them.

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