Texas Liquor License & TABC Licensing - Requirements, Application Process
A TABC permit or liquor license issued by the Texas Alcoholic Beverage Commission (TABC) is required before a business can start selling or serving alcoholic beverages in Texas. There are currently 37 different types of Texas liquor licenses.
Obtaining a Texas Liquor License
New Alcohol Permits
Getting a liquor license in approved in Texas can be a cumbersome and difficult process. Deciding on which liquor license, determining whether the location is wet for the alcohol permit you're seeking, navigating city alcohol regulations and choosing the appropriate TABC subordinate permits are just some of the things that need to be considered when your start the liquor license process.
Deciding on the type of TABC permit to fit your business model
Choosing the type of TABC Permits/permits to apply for should be one of the first steps in the application process. Also, once you decide which tier of the alcohol industry you will hold an interest in (Retail, manufacturing & distributing), you'll only be allowed to hold interests within that same tier. Holding an interest in more than one tier of the alcohol industry is called a "Tied House" and is prohibited under the Texas Alcoholic Beverage Code. Tied House Interest prohibitions are strictly enforced in Texas. A list of the different types of TABC permits can be found here.
Some of the most common primary Texas Liquor permits are:
Mixed Beverage Permit (MB) – Authorizes the sale of distilled spirits, wine and malt beverages for on-premise consumption, and also for off-premise consumption in some circumstances if the MB also holds a subordinate Food and Beverage Certificate (FB)
Wine and Malt Beverage Retailer’s Permit (BG) – Authorizes the sale of wine and malt beverages for on-premise and off-premise consumption. BG’s holders pay less taxes on alcohol sales for on-premise consumption than MB holders (8.25% sales and use tax vs. 8.25% MB sales tax + 6.7% MB gross receipt tax), but cannot sell liquor.
Wine and Malt Beverage Retailer’s Off-Premise Permit (BQ) – Authorizes the sale of malt beverages and wine for off-premise consumption. Commonly used by convenience stores and gas stations.
Private Club Registration Permit (N) – Authorized the service of wine, malt beverages and distilled spirits for club members’ on-premise consumption and off-premise consumption if the N also holds a subordinate FB. The biggest appeal of this permit is it can be issued in dry areas. Alcohol served for on-premise consumption is subject to mixed beverage taxes (14.95%).
Package Store Permit (P) – commonly referred to as a "liquor store", this permit Authorizes the sale of wine, malt beverages and liquor for off-premise consumption.
Brewer’s License (BW) – Authorizes the manufacture of malt beverages, and under certain circumstances, the sale of malt beverages to consumers for on-premise and off-premise consumption.
Winery Permit (G) – Authorizes the manufacture of wine and the ability to sell the same for on-premise and off-premise consumption.
Distiller’s and Rectifier’s Permit (D) - Authorizes the manufacture of distilled spirits, and under certain circumstances, the sale of distilled spirits to consumers for on-premise and off-premise consumption.
Subordinate TABC permits attach to a primary permit. Some of the most common subordinate TABC liquor licenses are:
Food and Beverage Certificate (FB) – an FB can attach to the following primary retail permits: MB, BG, BE, N, NB & NE. FB’s provide many benefits, including:
the ability for mixed beverage permit holders and private club permit holders to serve alcohol for off-premise consumption along with food prepared at the premises;
being exempt from having to hold a conduct surety bond or performance bond; and
automatically being qualified for a blue gun sign.
Some areas are only wet for MB’s that also hold FB’s (commonly referred to as a “Restaurant Mixed Beverage Permit”, or “RM”). As of January 1, 2022, the TABC lessened the requirements for businesses to hold an FB. Before the January 2022 rule change, a business had to maintain at least 40% non-alcohol revenue generated at the location to hold an FB; however, now businesses are exempt from the under-60%-alcohol sales requirement as long as the business has commercial cooking equipment at the premises.
Late Hours Permit (LH) - Can attach to the following primary retail permits: MB, BG, BE, N, NB & NE. Authorizes the service of alcohol between midnight and 2 a.m. Late Hours permits are either allowed by right because of the area's population size, or because of an enacted.
Brewpub License (BP) - Can attach to the following primary retail permits: MB, BG, BE. Authorizes the manufacture of malt beverages, and the sale of manufactured beer for on-premise or off-premise consumption.
Determine whether the proposed location is wet for the type of permit you’re seeking for your business.
After determining which TABC liquor license or licenses you'll need to apply for to operate under you desired business model, you'll need to find a location where those permits are allowed. A list the TABC prepared showing which city’s & counties are wet for certain types of permits can be found here. However, although the TABC wet/dry list is a good starting point, it is not conclusive and is only based on information provided to the TABC; only a city or county clerk’s office can make an official wet/dry determination for a TABC application.
Qualifications for a TABC permit
Once you decide on your permits and find a suitable location, you should verify that meet the minimum qualifications to hold a TABC permit.
Some of the qualifications for an applicant to hold a TABC permit include:
Must be 21 or older;
Cannot have any felony convictions in the last 5 years; and
Cannot have an interest in a TABC permit within a different tier. The three tiers are the manufacturing tier, distribution tier and retail tier.
Cannot have any moral turpitude violations within the last 6-months.
TABC application process
In September 2021, the TABC transitioned to an online application system called AIMS. The link to log into AIMs can be found here. Although the AIMs application process lists getting the city, county and comptroller to certify the L-Cert form as one of the last steps in the application process, we recommend that you start with this step (note that an L-Cert isn’t required for private club permit ). In our experience, obtaining a completed L-Cert form tends to take up the most amount of time in the application process.
Getting the city, county & comptroller to sign off on the L-Cert form early in the process will help ensure that the potential location is wet for the type of permit sought, that your business doesn’t have additional delays in being able to serve alcohol and that there aren’t any municipal ordinances prohibiting the TABC permit sought.
Also, the comptroller will refuse to sign off on the L-Cert if an officer of the applicant entity has delinquent taxes owed to the state, even if the taxes are owed by a different entity tied to an applicant entity officer.
The timing in which the L-Cert should be submitted is also important and varies depending on location. Some cities require the county to sign off before the city will sign the L-Cert form. For example, the City of Dallas requires that Dallas County sign before it will consider a TABC application. Conversely, many counties – such as Tarrant County – require that the city sign off before it will. Some cities even require that both the county & comptroller sign off on an application before the city will sign the L-Cert. Many cities have their own application processes that need to be completed before they will consider signing off on a TABC application.
City & County alcohol regulations
The Texas Alcoholic Beverage Code (TABC Code) is the ultimate authority on alcohol sales in Texas. Generally, cities and counties cannot enact ordinances regulating alcohol sales unless the TABC Code has a carved out an exception allowing for them to do so. The TABC Code allows municipalities to regulate alcohol sales in various ways, such as prohibiting the sale of alcohol within 300ft of a school, church, hospital or daycare. However, some cities have enforceable ordinances that are actually stricter than what the TABC Code allows because the ordinances were enacted prior to June 11, 1987 and are grandfathered in. On the other hand, some cities have enacted ordinances that aren’t authorized by the Code and are actually unenforceable.
Getting assistance with obtaining your TABC permit
This article only provides a high level overview of just some of the code provisions, rules and ordinances that need to be considered when a business enters the alcoholic beverage industry in Texas. There are also publication notices, required signage, best practices to avoid a comptroller audit, checking for tier violations, requirements to qualify for the Safe Harbor Defense, written alcohol policies that need to be adopted, ensuring the business is correctly structured, applying for a sales tax permit, etc. that need to be addressed when applying for a Texas liquor license. The information in this article is for informational purposes only and should not taken as legal advice.
Our expert TABC law attorneys and consultants understand the TABC application process, municipal application requirements & processes and TABC reporting requirements. We can handle the complex liquor licensing process for you and help limit the time it takes to get your business up and running. We work closely with restaurants, bars, private clubs, and breweries in Dallas, Fort Worth, Arlington, Houston and throughout Texas. We also regularly assist other Texas licensing services when a situation comes up that they're not sure how to handle.
We interact directly with the TABC on your behalf so you can focus on the more important aspects of your business. We can help you ensure that you're operating in compliance with the TABC Code and Rules and will assist in getting your business up and running as quickly as possible by expediting the liquor license application process.
Contact us today for any of your TABC licensing needs.