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New Jersey liquor license and insurance requirements

New Jersey liquor license and insurance requirements

By Meg Furey-Marquess
Oct 6, 2022
9 min read

If you're looking to open a spot of your own in New Jersey and would like to sell alcoholic beverages alongside your cuisine, you've probably got many questions. Hopefully, we have all the answers you need right here.

Do you need a liquor license to sell alcohol in New Jersey?

If you're planning on serving alcohol, you will need a license issued by the New Jersey Division of Alcoholic Beverage Control (ABC). 

Getting the license is a long process made more difficult because New Jersey caps the number of licenses available. You'll most likely have to purchase yours from someone who already has one, which can get expensive quickly.

Types of liquor licenses in New Jersey

Unlike other states where beer and wine licenses differ from hard alcohol licenses, New Jersey doesn't distinguish the kind of alcohol. While numerous liquor licenses are available, eateries wanting to sell alcohol should look into the Type 33 - Plenary Retail Consumption License.

New Jersey has capped the number of licenses available at 1 for every 3,000 people in a given municipality. With nearly every type of business selling alcohol wanting a Type 33 license, you can see how landing one for your own business can be difficult. 

Can a liquor license be transferred?

Yes. Due to the limits New Jersey puts on liquor licenses and the fact that many different businesses are competing for the same type of license, purchasing a license from someone else is pretty much the only way to get one.

When you're looking to purchase a license, make sure the license is from the municipality you want to be doing business. While you can transfer licenses from location to location within a municipality, you cannot transfer a New Jersey liquor license from municipality to municipality.

Additionally, just because you've purchased a license doesn't mean the ABC will approve the transfer. Finding and purchasing a license is only the first step; you've still got to go through the entire approval process.

How long does it take to get a liquor license?

Apart from the time it may take you to locate and purchase a license, the entire ABC license transfer process takes an average of 90 to 120 days, so plan accordingly. 

How much does a liquor license cost in New Jersey?

Finding a license for sale is the most expensive part of the process. Many licenses are "pocketed," meaning someone is holding onto their license without running any business, hoping the license will become more valuable over time.

Due to the scarcity of licenses, the average cost of purchasing one is $350,000, with many going for over $1,000,000. 

However, once you have a license, you'll need to apply to the ABC for a transfer. Costs can vary depending on the type of license transfer you're making and where your business is located.

First, there is a $200 upfront fee. There is also an Annual License Renewal Fee, which costs between $250 to $2,500 and is decided on by your local municipality.

Then, if you're doing a person-to-person or place-to-place transfer (that is, taking over an established business or relocating your own), you must also pay 10% of your Annual License Renewal Fee. 

If you're doing both a person-to-person and a place-to-place transfer (when you purchased a license and are opening a new place with it), you must pay 20% of your Annual License Renewal Fee as part of the application process. 

New Jersey liquor license requirements

To hold a liquor license in New Jersey, you’ll need to meet the following requirements:

  • Be 18 years of age or older
  • Have no conviction for any crime of moral turpitude
  • Present full disclosure of all beneficial interests in the license to be transferred
  • Not own of nor be an officer or director of any corporation that is a New Jersey alcoholic beverage manufacturer or wholesaler
  • Not have an interest in more than two retail licenses, except as otherwise permitted by law
  • Never had a prior license revoked for two years or more
  • Not be a law enforcement officer or any other person whose powers and duties include the enforcement of ABC laws or regulations

How to get a liquor license in New Jersey

The first step to getting a liquor license in New Jersey is finding someone to sell you theirs. After that, the process is long but straightforward:

  • Enter into a written purchase and sale agreement for the license.
  • Obtain written consent from the seller to transfer the license.
  • File New Jersey’s standard 12-page application and pay the required fees.
  • Publish a Notice of Intent to Transfer twice, one week apart, allowing the public to communicate any objections to the transfer.
  • File for the issuance of a Tax Clearance Certificate with the New Jersey Division of Taxation (your municipality cannot approve the license transfer until a Tax Clearance Certificate is issued).
  • Allow your municipality’s police department to conduct a background investigation, including fingerprinting, to ensure you’re legally allowed to hold a license and that your establishment meets all local and state requirements.
  • Attend a public meeting where the municipality will authorize the license transfer.

New Jersey liquor license renewal requirements

Liquor licenses in New Jersey are valid from July 1st to June 30th of the following year. You must submit a simple 1-page renewal application and fees before license expiration to allow your municipality time to pass a renewal resolution. 

In addition, all retail licensees must obtain a Tax Clearance Certificate from the New Jersey Division of Taxation before renewing the license. A municipal issuing authority can not even consider a renewal application unless a Tax Clearance Certificate is received.

The renewal cost is $200 plus the Annual License Renewal Fee, which can range from $250 to $2,500, depending on the municipality.

What are employee requirements to serve alcohol in New Jersey?

The only requirement New Jersey has for alcohol servers is that they are over 18. No other training or education is mandated by law.

New Jersey’s liquor liability and dram shop laws

New Jersey has two major dram shop liability laws on the books. This means that state law can hold a business liable for selling or serving alcohol to individuals who cause injuries or death because they’re intoxicated. 

In New Jersey, an establishment can be held responsible for their customers' actions if they serve someone who is "visibly intoxicated," or if they serve someone underage.

For example, say a group comes to your restaurant to celebrate a friend’s birthday. They order multiple rounds of drinks and have a good time, with one member of the party getting visibly intoxicated. 

Your server keeps serving the person because their friends say they won't drive. Still, later on, the person gets behind the wheel and gets into a car accident that injures the other driver. 

Your business can be sued by that driver under New Jersey dram shop laws because you continued to serve them even though they were visibly intoxicated. While it may seem unfair, your business could be held responsible for this accident.

What kind of insurance do you need to get a liquor license in New Jersey?

Once you've located and purchased a liquor license, fulfilled ABC approval requirements, and finally got your business up and running, it's time to protect it.

Liquor Liability insurance

With dram shop laws on the books in New Jersey, it’s smart to have liquor liability insurance because you could be held responsible for property damage, injuries, and court fees due to someone else's actions. 

General Liability insurance

General liability insurance is often the first kind of insurance a business purchases because it protects against the most common incidents that occur when dealing with the public. 

Workers’ Comp insurance

In New Jersey, if you have employees, you are required to have workers’ comp insurance. It can help cover expenses if an employee is injured or becomes ill because of their job.

Commercial Property insurance

More than just protecting your building, commercial property insurance covers your goods, gear, and inventory so you can get back to business fast. 

How NEXT helps New Jersey businesses 

NEXT offers customized insurance on tap. We offer liquor liability insurance alongside our general liability coverage.

With our online services, you can get a quote, review coverage options, purchase insurance, and have your certificate of insurance in about 10 minutes. 

Start an instant quote online today.

New Jersey liquor license and insurance requirements

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About the author
Meg Furey-Marquess is an experienced writer from Austin, Texas. With a special interest in both small business and personal finance, she believes that big ideas often start small. With a knack for narrative and a relentlessly curious nature, her goal is to amplify the “little guys.”
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