How Can a Bar Lose Its Liquor License? [2024 Liquor License Requirements]

Obtaining a liquor license is a necessary step if you plan to serve alcohol. Because alcohol is a regulated product, and one that can lead to severe consequences if mismanaged, barkeepers pay a licensing fee and they’re covered for a set amount of time, determined by their local government. 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. 

But a liquor license can also be revoked before it expires if the owner abuses the privilege, and attempting to serve alcohol without the proper licenses can lead to penalties, fines, or even being forced to shut your doors. 

Keep reading to learn more about liquor licenses, varying rules by state, and how to avoid any issues that could get it revoked.

How to get a liquor license

The specifics of obtaining a liquor license will vary by area, and depending on what type of license you’re applying for. However, there are a few essential steps nearly every business needs to follow.

First of all, familiarize yourself with your state’s liquor licensing laws. Some states and cities (like Boston, Massachusetts) only issue a certain number of licenses and you may not be able to get one immediately. Then, decide which kind of license best suits your needs.  Here are a few of the different options for liquor licenses that may be available to you: 

• A tavern license is for establishments that serve primarily alcohol.

• A beer and wine license is for places that want to serve alcohol to accompany food but no hard liquor. 

• A restaurant license for food and alcohol. In this case, the state may set a limit on how much of your profits can come from the latter. 

Liquor license rules by state

Each state has its own Alcohol Beverage Control (ABC) agency to regulate the sale of alcohol – to better understand your state's laws and the process of getting a liquor license, contact your local ABC agency. Some states require you to apply in person, others allow applications online. Some states require applicants to notify the public, either with a sign on the premises or an ad in the newspaper. Some states require additional licensing through the city or county. The supporting documents also vary, depending on location and the type of license you’re applying for. Check your state’s requirements carefully before you start the application to avoid unnecessary delays.

An alcohol license can take as long as six months to come through, so it’s important to prioritize this step in your opening journey. You should also be prepared to pay anywhere from $300 to $14,000, depending on where you are and the type of license you’re applying for. Some states may also tack on extra fees.

How a bar can lose its liquor license

An alcohol license is contingent upon business owners following state law. Here are some of the most common reasons for the revocation of a liquor license.

Serving minors (or not checking IDs!)

The legal drinking age everywhere in the U.S. is 21. Some underage drinkers try to get around this law by using fake IDs, which are also illegal. Bar staff should be trained in how to identify fake IDs. If a bar gets caught selling alcohol to minors, everyone may be liable for punishment, including the bartender, server, and business owner. The punishment depends on the state and can range from fines to being forced out of the bar business completely to, the bar losing its liquor license.

Over-serving guests and disorderly conduct

Even though serving alcohol is a core element of bars, intoxicated customers can be a danger to other customers, neighbors, and themselves. Disorderly conduct generally means being drunk in public or causing a public disturbance. More than 30 states have dram shop laws that hold bars and staff liable for actions committed by a person who was over-served at their establishment, including DUIs. The best way to keep your guests and the public safe is to understand the signs of intoxication via alcohol training for bartenders and servers.

Signs to look out for include: 

• Loss of coordination

• Flushed face

• Loud or slurred speech

• Bloodshot eyes

• Sleepiness

• Changes in mood, such as aggression or depression

Not following local liquor laws

Bars can be penalized for not following local liquor laws to the T. Examples include:

• Serving alcohol after a certain time of night or after the license specifies they have to stop serving

• Offering drink discounts after happy hour (or offering happy hour where not permitted!) 

• Allowing customers to drink outside without a patio permit

• Off-premises sales without a license

Having untrained staff members

Many states require certification for staff members in health and safety regulations, alcohol management, bystander intervention, and safe service of alcohol. Even if certification isn’t required in your area, it’s still a good idea to train your bartenders and servers on how to deal with intoxicated customers to make your bar a safer and more hospitable place for customers and neighbors.

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It takes a lot of time and effort to secure a liquor license, and you don’t want to lose it. By obeying local laws and training your staff, your bar will be able to help guests raise a glass for years to come.