What is a Liquor License and Why is it Such a Big Deal?


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A liquor license is, as the name implies, a license for the service of alcohol. But, many have referred to the procurement of a liquor license in almost reverent terms, as though it is a rare prize. So what is a liquor license and why is it such a big deal to have one?

In the United States, liquor licenses are issued under different laws in each state. separately by each individual state. Typically, each state may have regulations specific to that state, and some municipalities may also have their own local laws, as well. A licensing process makes it possible for governments to enforce laws regarding the service of alcohol that would otherwise be difficult to police. For example, many jurisdictions have limits on the numbers of drinks an establishment may serve a customer, zero discounts on drinks, and rules that require unfinished bottles of wine to remain in the restaurant or bar in which it was served. It would be difficult to stay on top of such rules if the government was solely responsible for policing these practices, but if bars and restaurants are afraid of losing a liquor license it makes it possible to enlist the establishments' cooperation.

To further reinforce this sense of value, liquor licenses are usually limited in number and often have very high fees associated with their acquisition. Unlike a driver's license, which is relatively easy to acquire, limiting the number of liquor licenses and making them difficult to obtain makes them exceptionally valuable. As a result, restaurants and bars cannot simply obtain one, but must work for it and take steps to protect it. The loss of a liquor license for most establishments would be a crippling, possible business ending event. As such, proprietors of these establishments will usually do everything they can to ensure that no laws are violated in their establishment such that the license could be revoked.

There are commonly several types of liquor licenses:

Restaurant Liquor License: This is the most common type of liquor license. It is also known as the “all liquor license” because it generally allows one to serve all types of alcohol.

Beer and Wine Liquor License: This is also a very common type of license, but it varies from the “all liquor license” because one is not permitted to sell stronger alcohol or spirits.

Tavern Liquor License: This license is commonly used for restaurants that serve both alcohol and food, but have at least 50% of their sales solely based on liquor.

Server License: In addition to liquor licenses for establishments, some jurisdictions also require individual servers to be licensed.

So, in simplest terms, a liquor license is a legal authorization to sever alcohol. It is a big deal because it is hard to acquire. And, it is hard to acquire in order to force businesses to police their own industries. Of course, if you have a legal issue related to acquiring or retaining a liquor license, it is too valuable a commodity to risk handling it on your own, so you should seek the assistance of a competent, qualified attorney.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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