How to get a liquor license in Texas
Obtaining a liquor license may provide business owners with substantial benefits. Alcohol has some of the highest profit margins, ranging from 60% to 85%. Those numbers alone might be justification to invest some time learning how to legally add alcohol sales to your business model.
One of the first things you figure out when you start the liquor license application process is that the entire alcohol market from production to consumption is tightly governed in the State of Texas. But once you’ve hopped through all the hoops, perhaps your first sale will be a glass of champagne to celebrate the added cash flow.
Texas liquor license requirements and laws
The Texas Alcoholic Beverage Commission (TABC) regulates all aspects of the alcoholic beverage industry in the state, including advertising, importation, manufacturing, sales, taxation, and transporting.
According to the Texas Alcoholic Beverage Code, you will be ineligible to receive a Texas liquor license if:
- You’re under 21 years old.
- You’ve violated the alcohol code within the past 6 months with any act that involved “moral turpitude.”
- You’ve violated the Texas liquor and alcohol code in the past 2 years.
- You’ve had a felony conviction in the past 5 years.
- You have tax debt (check with your local tax assessor-collector).
- You’re unable to demonstrate “good moral character.”
Beyond meeting the state’s rules, counties and cities may have local ordinances, zoning restrictions, fees, standards for late-hour business operations, and even certificate of occupancy requirements. For example, the city of Houston has a 1,000-foot alcohol-free zone around public schools. So, the best course of action after contacting the TABC is to also reach out to your City Clerk’s Office or City Secretary for specifics on alcoholic beverage permits.
The licensing process
The TABC website has an online suite called Alcohol Industry Management System (AIMS) that lets you complete the process online. That said, TABC says the process from start to finish can still take about 50 days, but they boast the overall time frame is much more efficient than when the organization used paper application forms only.
Here’s an overview of what you need to get started with AIMS, mostly taken directly from the TABC website:
- Complete AIMS onboarding: Using AIMS is the easiest way to get into business. Create an account and let AIMS guide you through the application process. The rest of this list will highlight some of the key things you’ll need to do along the way.
- Choose an alcohol industry tier: Are you manufacturing alcohol, distributing it, or selling it directly to consumers? Your answer will help you find the right license or permit for your business.
- Create and register the business: All businesses register with the Texas Secretary of State and the Comptroller of Public Accounts. The Small Business Administration has resources to help you with federal registration requirements.
- Get required signs: Visit TABC’s Sign Requirements page to learn about required signs. Contact your local TABC office if you need assistance.
- Complete your AIMS application and get TABC certifications: Complete the remaining steps in AIMS. If using paper applications, which take longer to process, you’ll fill out the Prequalification Packet, Location Packet, and Business Packet. Make sure to complete the public notice, publisher’s affidavit, and all city, county, and state certificates.
- Submit complete application: All sections must be completed, signed, and notarized. You’ll also want to understand the responsibilities of your license or permit.
- Keep wait time in mind: It can take about 50 days from the date TABC receives a complete application to issue a new license. Plan ahead if you’re opening a new business or location.
Types of Texas liquor licenses
Liquor licenses are broken up into 3 tiers in Texas: manufacturing, distribution/wholesale, and retail. Manufacturers produce alcoholic drinks, distributors and wholesalers transfer them to individual businesses, and retailers sell them directly to consumers.
Along with the liquor license, the businesses in each tier may have different insurance requirements. For example, a manufacturer is likely okay with workers’ compensation and general liability insurance, while a distributor may need small business insurance, a caterer could get catering insurance, and a beer retailer might buy retail insurance. And if you sell alcohol at all, you’ll probably need liquor liability insurance.
Perhaps you already know which tier your business lies in, but the best way to be sure is to contact the TABC. You can call them at 512-206-3333, or you can check if a local office is near you here.
In addition, it’s smart to contact the TABC because the licenses vary based on several factors, including what type of business you have, whether you need a temporary or more long-term permit, and whether there will be on-premise consumption or off-premise consumption.
There are also relevant courses to the specific liquor and beer licenses, and you can learn more about the various licenses here. All the alcoholic beverage licenses are listed below to give you a head start before you contact the TABC.
- Brewer’s License and Self-Distribution License
- Distiller’s and Rectifier’s Permit
- Winery Permit
Distributors and Wholesalers
- General Distributor’s License and Branch Distributor’s License
- Wholesaler’s Permit
- General Class B Wholesaler’s Permit
- Mixed Beverage Permit
- Nonprofit Entity Temporary Event Permit
- Wine and Malt Beverage Retailer’s Permit
- Wine and Malt Beverage Retailer’s Off-Premise Permit
- Retail Dealer’s On-Premise License
- Retail Dealer’s Off-Premise License
- Private Club Registration Permit
- Private Club Wine & Malt Beverage Permit
- Package Store Permit and Local Distributor’s Permit
- Wine-Only Package Store Permit
Can I get a one-day liquor license in Texas?
Yes, you can acquire a one-day liquor license or alcohol permit in Texas for your special event, fundraiser, or private party. To get approval from the TABC for your temporary permit, you must submit the completed forms for your event at least 10 business days before the actual event date. Failure to submit means paying the following late fees:
- $300 for applications received 7 to 9 business days before the event
- $500 for applications received 4 to 6 business days before the event
- $900 for applications received 1 to 3 business days before the event
For more information on the temporary liquor licenses, go here.
How much does a Texas liquor license cost?
Here’s an idea of the costs: manufacturing prices run from $500 to $3,000, distribution from $3,500 to $4,000, and retail from $0 to $5,300. In addition, some other licenses and permits go as high as $10,000. Also, you may be required to get a bond, and those range from $5,000 to $30,000.
You already knew starting a new business has its ups and downs, along with a mountain of administrative hurdles and red tape. But once you’ve checked all the boxes, your cup will be overflowing with alcohol profit margins.
And while you’re still thirsty for success, you can cross a few more items off your to-do list, like getting liquor liability insurance, restaurant and bar insurance, or small business insurance. When you’re ready, in as little as 5 minutes, you can get a quote at Huckleberry.