Starting an establishment that serves alcohol is a lengthy process that requires you to obtain business permits and handle many other moving parts. Whether you’re creating a restaurant or another type of business that sells alcohol, you’ll be tasked with obtaining a liquor license.
All licensing activities for alcoholic beverages are overseen by the California Department of Alcoholic Beverage Control. This department provides California residents and business owners with comprehensive information about the application process and requirements that must be met. This process can take anywhere from two months to more than a year without help from a permit expediter.
When you make the decision to apply for your liquor license, there are several factors that must be taken into account. For instance, you may need to obtain zoning approval.
If you don’t understand what documentation you must provide with your application, you could make a mistake that would delay the application process. Keep in mind that there are more than 50 license types to select from, which can make it challenging to find the information you need. The following guide tells you everything you should know about obtaining an alcohol license.
Steps for Getting a Liquor License in California
There is a step-by-step process that you must follow if you want to be approved for a liquor license in California.
1. Determine the Type of License You Need
The license you decide to apply for depends on the kind of alcohol you’d like to sell and where it will likely be consumed. If you’re opening a bar, restaurant, or retailer, the most common licenses are off-sale and on-sale ones. These licenses include:
- On-sale beer license allows you to sell beer only
- On-sale beer and wine license gives you the opportunity to sell wine and beer only
- On-sale general license allows you to sells wine, beer, and distilled spirits
- Off-sale beer and wine license allows for the sale of beer and wine to be consumed off-premises
- Off-sale general license applies to the sale of wine, beer, and spirits to be consumed off-premises
Keep in mind that there are also licenses that are more specific, which include an on-sale general license for restaurants.
2. Determine the Applicable License Requirements
The next step in this process involves finding out what your license requirements are. These requirements differ depending on the type of alcohol license you apply for. Some general requirements that apply to most licenses include:
- Sales tax permit – Before applying for a liquor license, an additional application must be sent to the State Board of Equalization for a seller’s permit for sales tax.
- Escrow requirements – When purchasing a business that already exists, you need to create an escrow account for the entire purchase amount. The escrow agreement you make needs to state that the payment will only be finalized once the California ABC approves the transfer of the necessary license. During the transfer process, you might need to send in a notice to the local county recorder.
- Federal requirements – Depending on your location and business type, you might need to seek a special occupational tax stamp or federal basic permit.
- Zoning and location approval – California’s ABC department requires you to get in touch with local county officials to have your location inspected. In the event that a business is being opened in a new area, you might be tasked with applying for a conditional use permit.
3. Determine the Cost of Your Application
Now it’s time to determine how much your application will cost. The ABC has a comprehensive fee application schedule that applies to different license types. These fees include:
- General license application fees extend from $945-$16,560
- Non-general license fees extend from $105-$945
- Person-to-person transfer fees extend from $105-$1,305
- Premise-to-premise transfer fees extend from $105-$6,275
The lower costs are available for non-priority licenses. In comparison, the higher costs must be paid when attempting to obtain a priority license. Keep in mind that other fees might apply to your situation, which include bad check fees, operating fees, and fingerprinting fees.
4. Submit Your Application
The fourth and final step in this process involves filing your application. Once you do so, there are five stages to the application process, which include:
- The initial filing
- Any notifications
- An in-depth investigation
- A final review
- The issuance of your license
During the notifications stage, you’ll need to post a Public Notice of Application on your business site for 30 days. More information may need to be given to the ABC throughout the investigation stage. Some additional steps that you may need to complete include:
- Place a notice in a local newspaper
- Send a notice to everyone who lives in a 500-foot radius from your premises
- Get proof from the LADBS that the zoning allows for an ABC license
In most cases, the entire application process will take around 55-70 days to be completed. In the event that your application is eventually contested, this process could last for as long as 175 days.
After you’ve received approval and obtained your license, there are certain steps you need to take to make sure that your license isn’t revoked, which involve renewing your license as needed and adhering to any regulations based on your license type.
License Locators Can Expedite Your Business Goals
Here at Crest, we can help you locate and finalize your liquor sales license. Our services apply to all other business licenses you may need to apply for as you open a business. If you hire us before the application process begins, we can help you avoid time-consuming delays that often arise during the application process.
Five Questions To Ask Before Applying For California Liquor License
Before you apply to get your liquor sales license, there are a few contingencies you should consider.
1. What Type of License Best Suits the Needs of My Restaurant?
The two types of liquor licenses are Type 41 and Type 47, the former of which applies only to beer and wine. Type 47 applies to beer, wine, and liquor. In order to qualify for these types of licenses, your restaurant needs to be an actual “eating place”, which means that it needs to come with a large enough kitchen to support serving ordinary meals as opposed to just appetizers. At least 51% of your restaurant’s gross receipts need to come from the sale of food.
2. What Type of Local Permit Do I Need to Serve Alcohol?
Before you can obtain a state liquor license, you’ll need to apply for local zoning permits. These permits are referred to as conditional use permits (CUP), which allow you to serve alcohol on the property you own. Even if ownership eventually changes, a CUP will remain in place. Liquor licenses are issued directly to the business owner instead of the property. Once you’ve obtained a liquor license, you could take it with you in the event of a relocation. However, this scenario would require a new CUP.
3. How Many Other Restaurants are Serving Alcohol in the Area?
The ABC and local municipalities will monitor the total number of restaurants that serve alcohol in a census tract to make sure that over-concentration doesn’t take place. Over-concentration means that the total ratio of licenses to population is higher than the ratio in the county itself.
It’s possible for two restaurants that are adjacent from one another to be in completely different census tracts, which means that they would be subject to different requirements pertaining to over-concentration. If these issues exist, you might need to request a finding for public convenience and necessity (PCN). If you request a PCN, you may need to take part in another public hearing. In the event that your local municipality doesn’t approve a PCN, you won’t be able to obtain approval for your liquor license application.
4. How Much Time am I Willing to Spend Obtaining My License?
Ask yourself how much time you’re willing to spend obtaining your license. If you need to seek zoning approval, this process can take anywhere from 3-12 months. While ABC approval can also take a long time, you should get an answer to your application well before 12 months has passed.
Certain municipalities provide an expedited review that reduces the application process by half. As mentioned previously, the costs are much higher if you want to submit a priority application. In Los Angeles, an expedited review may cause your application fee to double.
5. What Can I Afford to Spend Obtaining My Liquor License?
The final question you should ask yourself involves what your budget is. Applying for a conditional use permit in Los Angeles can cost you anywhere from $8,000-$14,500. The higher cost allows for an expedited review.
A Type 41 license costs around $650 in application submittal fees. A Type 47 license comes with submittal fees of $12,000. In the event that a new license isn’t available, you could purchase an existing one. However, doing so can cost anywhere from $30,000-$50,000.
Before you begin applying for an alcohol license and local permits, these considerations should be taken into account. Hiring a permit expediter ensures that you don’t make any mistakes during the application process. Evaluating your timing, location, needs, and budget should also help you avoid errors.
Jason Somers, President & Founder of Crest Real Estate
With over 15 years of professional experience in the Los Angeles luxury real estate market, Jason Somers has the background, judgement and track record to provide an unparalleled level of real estate services. His widespread knowledge helps clients identify and acquire income producing properties and value-ad development opportunities.