If you want a liquor license in Arizona, the cost ranges from $50 to $2,000. The cost depends on whether you're a bar, a restaurant, an out-of-state winery or one of the other categories of licensees. Some licenses you simply apply for. Others are awarded in a lottery or by buying one from a current license holder.
What Kind of License?
The first step to applying is deciding which kind of liquor license application you need. In some cases, you may want multiple licenses, such as if your craft distillery sells over the Internet.
- An in-state producer's license allows you to make beer, wines or distilled spirits, and sell to a wholesaler. You can also sell your wares to patrons on your premises.
- An out-of-state producer's license allows you to ship beer, wine or spirits to a licensed Arizona wholesaler. There are also licenses for out-of-state distilleries, microbreweries and wineries.
- An in-state microbrewery license. Arizona law defines a microbrewery as one that produces between 5,000 and 6.24 million gallons a year.
- A wholesaler's permit allows you to buy and store liquor and sell it to retailers.
- A government license lets you sell in government premises such as a state university or a city-owned sports facility.
- A bar license allows you to sell hard liquor in a bar. A beer and wine bar license does the same for beer and wine.
- A conveyance license lets the owner of, for example, an airline, railroad or a chartered vessel sell drinks on their boats, planes or trains.
- A liquor store license authorizes you to sell packaged bottles of liquor for off-site consumption. A beer and wine store application works similarly.
- A restaurant license allows you to sell drinks in your restaurant. To qualify for this license, your business has to generate at least 40 percent of its sales from food.
- A hotel/motel license authorizes both the sale of restaurant drinks and the sale of bottles in-room minibars.
- A farm winery can sell wines at retail, or to customers for on-site or off-site purchases.
- Wineries and craft distilleries can apply for an internet sales and residential shipping license if they plan to sell their goods that way. Qualifying for the license depends in part on production levels. For instance, an in-state winery can only sell over the Internet if it produces less than 20,000 gallons of wine a year.
- A license for a private club allows the club to sell drinks on the club premises, but only to members and their guests.
- A direct-to-consumer wine shipment license allows wineries to ship bottles to customers in and out of Arizona.
The state has other categories of licenses, for example, for fairs, festivals and other special events. You need to apply at least 10 days ahead of the event.
Liquor License Application Basics
No matter which license you're applying for, there's information you'll have to provide the state on the application form:
- The type of license you want.
- Whether the license applicant is an individual, a partnership, a corporation or some other business structure.
- Your name, and the name of any of your partners.
- The location of the property where you'll be making or selling alcohol.
- If you represent a corporation, Arizona wants a list of officers and directors, plus any stockholders with more than 10 percent ownership of the business.
- Designation of the person who will manage the licensed premises.
- The fingerprints of yourself and your manager. You can't get the license until you've successfully completed a background check. If the check finds that you have a felony on your record in the past five years, your application will be rejected.
- Floor plans and diagrams showing where your business will produce, store or sell drinks or bottles.
- A sworn statement that the property is not within 300 feet of a church or a school. Some applicants, such as hotels, motels and restaurants, are exempt from this.
- Proof of Arizona residency.
- Proof of citizenship if you were born outside the United States, or proof you're a legal alien resident.
- A menu and operation plan if you're opening a restaurant or hotel/motel restaurant.
- A recommendation from the local government.
- Payment of any local government licensing fees.
Once you submit everything, the approval process will take from 65 to 105 days. If you're approved, you'll have to pay your liquor license in Arizona's cost.
If your proposed business location was refused a license in the previous 12 months, or your application was incomplete, the Department of Liquor will turn you down.
The Liquor License Lottery
With most Arizona liquor licenses, you apply, wait, then get approval or rejection. Some licenses offer an added hurdle: the liquor department sets a limited quota of licenses in each county, based on population. When a county's population grows enough to justify another license, the department awards it by license lottery.
To compete, you submit an entry form along with a $100 fee and all necessary paperwork. If there are more applicants than licenses available, the licenses are awarded in a random drawing. If you win, you pay the state the fair market value of the license, which is listed on the lottery website. Lottery winners have to meet all the regular requirements for a license holder.
Bars, wine bars and liquor stores each have their own quota system.
Buying an Arizona Liquor License
Another approach to obtaining a liquor license is to buy one from a current license holder. This doesn't work with all license categories: beer and wine store, restaurant and hotel/motel licenses aren't transferrable, for instance. With quota licenses such as bars, buying is an option: you can buy the business with the liquor license or use the license to open a new business elsewhere.
Suppose you want a series nine liquor license, authorizing you to open a liquor store in Arizona. The application process works largely the same but before applying you have to find an Arizona series nine liquor license for sale. Then you have to convince the owner to sell it to you.
Arizona Liquor License Violations
An Arizona alcohol license lasts for one year. To renew a liquor license in Arizona, the cost ranges from $25 for a small out-of-state winery to $500 for a restaurant liquor license. Like the original application, there are a lot of conditions attached that could cost you your license:
- You're behind on your taxes. In some cases, the state can levy an Arizona liquor license lien, a claim on your liquor license, until you're caught up.
- If you have any unresolved Arizona liquor license violations, that can block your liquor license renewal.
- Owners and managers have to undergo liquor business training every three years. If you fall behind, you can lose your liquor license.
- Even if you're not currently using your license, you have to renew it to keep it.
- After three years of non-use, a license automatically reverts to the state.
Some businesses have to provide extra information. Restaurants and hotels have to submit a report on their business data and sales; microbreweries, wineries and distilleries submit a production report showing their production levels. If, say, restaurants make less than 40 percent of sales from food, or microbreweries exceed the amount they're allowed to sell, their liquor license may have a problem.
- Arizona Department of Liquor: License Fees
- Arizona Department of Liquor: Liquor License Kits
- State of Arizona: License Processing FAQs
- ADL: Liquor Lottery Instructions
- ADL: 4-206.01
- State of Arizona: Liquor License Renewal Instructions
- Arizona Department of Liquor: Internet Sales & Residential Shipping
- The actual Arizona Liquor License application is available online. See our Resources section to go print two copies...one for you and one to send in.
- Don't rush in filling out your application. Arizona's liquor license requirements, regulations, and restrictions are such that even the slightest error or omission by the applicant can result in delaying the process far beyond the normal time line. Fill out the form completely and carefully.
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com