How to Get a Liquor License in Kentucky

How much does a liquor license cost it Kentucky?

A liquor license in Pennsylvania can cost from $1800 - $5000. See the full fees associated with different types of liquor licenses in Pennsylvania here.

The liquor license process can take anywhere from 40 days to six months — learn about the types of liquor licenses in Kentucky and how to apply for them.

Selling alcoholic beverages is one of the most profitable revenue streams for restaurants, bars, nightclubs, and even cafes. And since many alcoholic products are shelf-stable, investing in a full bar, plus a beer and wine program is a safe bet to help bring in greater profits and increase average check sizes. Ultimately, consumers are willing to pay more for their overall restaurant experience if you give them the option to add a beer, cocktail, or glass of wine to their meal. 

But because alcohol is a regulated product, and one that can lead to severe consequences, the state Department of Alcohol Beverage Control requires all businesses that sell alcohol to be licensed to do so before they serve their first drink. Getting a liquor license can be complicated, and it’s an expensive part of the opening process, but many businesses see it as an initial hurdle to overcome so that they can bring in greater profits down the line. 

And once your liquor license comes through, it’s also important to ensure that all staff that serve liquor are SmartServe certified, and can spot (and intervene) when a customer is approaching their limit.

To get an alcohol license in Kentucky, they’re state-administered, so you’ll have to go through the Kentucky liquor board approval process. We’ll get into the various types of liquor licenses available to Kentucky restaurateurs, the costs of each of them, and the process to apply. 

What are the types of liquor licenses in Kentucky?  

There are many different types of liquor licenses in Kentucky. To find the relevant licenses for serving alcohol in your restaurant, you should consult this guide to ensure that you are selecting the best one for your operation and be aware of the state fee for each.

How to Get a Liquor License in Kentucky

Securing a liquor license is a critical step for any restaurant that plans to serve alcohol, but the process can be complex, with varying rules and procedures depending on your location. Here’s a guide to help you understand each phase and avoid common pitfalls.

1. Research Local and State Requirements

The first step is to research the specific liquor licensing laws in your state, county, and city. Each jurisdiction has its own set of rules, and knowing these upfront will save you time and help you avoid delays. Start by visiting the website of your state’s Alcohol Beverage Control (ABC) board or your local licensing authority. Key areas to focus on include:

• Types of licenses available (beer and wine, full liquor, on-sale, off-sale)

• Zoning restrictions that may limit alcohol sales in certain areas

• Quota systems, which some cities use to cap the number of available licenses

• Dry zones or neighborhoods with restrictions on alcohol sales

If your location has a limit on the number of licenses, you may need to wait for one to become available or purchase one from an existing business, which can add complexity and cost to the process.

2. Identify the Appropriate Liquor License for Your Restaurant

Choosing the right license depends on the type of alcohol you plan to serve and how you will serve it. There are several different types of licenses, each with specific legal boundaries:

• Beer and Wine License: Allows you to serve beer and wine but excludes spirits. This is often easier to obtain and less expensive.

• Full Liquor License: Grants permission to sell beer, wine, and spirits. These licenses are typically more costly and regulated.

• On-Sale License: For alcohol consumed on the premises. Most restaurants and bars need this type of license.

• Off-Sale License: For alcohol sold to customers who will consume it off-site, such as liquor stores. Some restaurants with retail components may need both an on-sale and off-sale license.

Make sure you also consider your restaurant’s business model. For example, if you’re planning to offer delivery or catering, you may need an additional permit for off-premise alcohol sales.

3. Gather Necessary Documentation

The liquor license application process involves a significant amount of paperwork. Having all of your documents ready beforehand will make the process smoother. Commonly required documents include:

• Proof of business ownership (such as Articles of Incorporation or an LLC agreement)

• Lease or property ownership agreements, proving your restaurant has a legitimate address

• A detailed floor plan of the restaurant, including areas where alcohol will be served and stored

• Health and safety permits or certificates of inspection

• Financial statements for the business, which may include tax returns or proof of capital

• Background checks for owners, partners, and key employees, as many jurisdictions will want to verify that the individuals involved have clean criminal records and no history of alcohol-related offenses

Make sure every stakeholder involved in the restaurant, including investors, managers, and significant shareholders, has their paperwork in order, as many areas require background checks for everyone with a vested interest in the business.

4. Submit Your Application

Once you’ve completed your research and gathered all necessary documentation, it’s time to submit the application to your local ABC board or the relevant municipal department. This part of the process can often be done online, but some areas still require paper applications. Double-check that the application is filled out completely and accurately—missing or incorrect information is a common reason for delays or rejections.

In some locations, you may be asked to submit additional forms, such as a fingerprinting card for background checks or personal history statements. Ensure that these are submitted along with the main application.

5. Pay Application Fees

The cost of a liquor license varies significantly depending on the type of license, the size of your restaurant, and your location. In some cities, you might pay a few hundred dollars, while in others, the fees can reach several thousand dollars. Additionally, there may be annual renewal fees to keep the license active.

In jurisdictions with a quota system, you may need to purchase an existing license from a current license holder if no new licenses are available. This can significantly increase the cost, as liquor licenses in high-demand areas can sometimes sell for six figures.

6. Wait for Approval

Approval times can vary dramatically based on your location, the type of license, and whether there are any objections to your application. While some areas may approve your application in a matter of weeks, others may take several months, especially if a hearing is required. Stay in regular contact with the licensing authority, and don’t be afraid to follow up if you experience delays.

7. Stay Compliant and Renew Your License

Once your license is approved, you’ll need to ensure strict compliance with local alcohol laws, including:

• Age verification procedures to prevent serving minors

• Hours of operation for alcohol service

• Record-keeping requirements for alcohol sales

Many jurisdictions also require you to renew your liquor license annually. Be proactive about staying up to date with these requirements to avoid penalties or the risk of losing your license.

How much does a liquor license cost in Pennsylvania?

A liquor license in Pennsylvania can cost from $1800 - $5000. See the full fees associated with different types of liquor licenses in Pennsylvania here.

What are the annual fees for Kentucky liquor licenses?

According to the Kentucky liquor board, annual license fees for liquor licenses relevant to restaurants are as follows. Some have a tiered pricing structure based on how populous their city is, while others have one flat fee.

As you work through the application process, you will be able to form a more complete picture for the annual costs associated with keeping your liquor license and remaining compliant with state laws.

What are the fees for person to person liquor license transfers?

There are many situations where a business owner will need to transfer over (or sell) their liquor license to another person, but there are fees associated with this transaction. Toast recommends you research the fees for the different types of person to person liquor license transfers, which can vary depending on whether or not the application includes a general license. To learn more about each type, see the application fee table for person to person transfers on the ABC website.

What is the process for getting a liquor license in Kentucky?  

Fill out forms and collect documentation

What documents will you need to get a liquor license in Kentucky?

The list of ABC forms to fill out is extensive and varies widely by what kind of business entity is applying: an owner, an LLC, a partnership, a corporation, a limited partnership, or a trust. Local offices provide this information in person. 

Additional documents will also be needed and will vary depending on the type of business entity, but for all types of applications,

• You will need to show a state-issued ID, a driver’s license, or passport for the person applying at the ABC office. 

• You will need to show a copy of your conditional use permit or a receipt that shows your application has been submitted, which can be obtained from a city or county planning department.

• You may need to show proof of the source of your funds, including bank statements, loan papers, financial statements, gift letters, real estate papers, and more.

Go to the nearest ABC office

In Kentucky, getting a liquor license involves finding your nearest ABC office and making your way there. 

You’ll be asked to provide the above documentation about you and your business. 

Notify the public

Once you’ve filled out all your forms and collected your documentation and submitted it all in person, you’ll be required to notify the public about your business’s intent to secure a liquor license, usually with a sign pasted visibly on the premises. Some areas will require you to take out a newspaper ad announcing it, or pursuing other avenues. 

ABC investigation and decision

Then, the ABC will notify officials in your area and ensure the liquor license wouldn’t constitute a public nuisance or contradict zoning laws. Then, the ABC will investigate you and your potential business for any red flags, they may also investigate the physical business location, and then they do a final review of your whole application. 

That’s when you’ll hear if you’ve been approved or not. If you have, you’ll receive your liquor license and be able to start using it. If you have been denied, you can initiate a hearing and appeals process.

What are some common challenges in the application process?

According to ABC, the most common issues that delay the approval of liquor license applications include the premises still being under construction and not ready to open, fee mistakes or omissions, document mistakes or omissions, or liens placed against the business, local cities and counties, or local health departments. 

Some of the common reasons for being denied include having a disqualifying police record, being under 21, finding fraud in the application, or location-based issues like the premises being too close to a school, hospital, church, or other type of business that could experience problems with a liquor-license business nearby,  zoning issues, tenancy issues, or if the area has problems with crime which could be made worse by a liquor-licensed business. 

How long should you expect the liquor license process to take?

The Kentucky liquor license process typically takes between 30 and 120 days, but if there are issues that come up throughout the process, it can go up to 175 days or longer.

When to start the liquor licensing process

To be safe, start your liquor license application process 4-6 months before you plan to open. If you want to be all but certain that you’ll be able to have your liquor license in hand at your grand opening — and be able to toast with champagne, not Martinelli’s sparkling apple juice — start six months in advance. You never know what kind of issues your case may spark, so leaving a longer amount of time is a smart idea.

The work continues!

The first thing you’ll need to do when working to open a restaurant is write up your restaurant business plan. But shortly after that comes the licenses and permits process, including your liquor license application — which, as mentioned above, can take anywhere between 40 days and six months. So get that part started as early as possible.