Texas restaurants represent a $70 billion industry, with over 50,000 locations and 1.3 million employees. 9 out of 10 restaurants have fewer than 50 employees, meaning the bulk of this industry consists of small businesses. Let's jump into the Lone Star State's laws.
- Do you need a liquor license to sell alcohol in Texas?
- Types of liquor licenses in Texas
- How long does it take to get a liquor license?
- How much does a liquor license cost in Texas?
- Texas liquor license requirements
- How to get a liquor license in Texas
- Texas liquor license renewal requirements
- Can a liquor license be transferred in Texas?
- What are employee requirements to serve alcohol in Texas?
- Texas’s liquor liability and dram shop laws
- What kind of insurance do you need to get a liquor license in Texas?
Do you need a liquor license to sell alcohol in Texas?
Anyone interested in operating a business serving alcohol in Texas must have a license issued by the Texas Alcoholic Beverage Commission (TABC).
If your business has anything to do with alcohol in Texas, you will work with the TABC. It controls licensing for retail and oversees manufacturing and the distribution/wholesale of alcohol.
While Texas has statewide alcohol laws, local voters are given what is known as the “Local Option” when it comes to alcohol sales and laws. This allows individual cities or counties to decide what kinds of alcohol (if any) can be sold within their borders.
For example, out of 254 Texas counties:
- Five counties have elected to be completely dry.
- Fifty-nine counties have elected to be completely wet.
- The remaining counties contain a mix of wet and dry cities and municipalities.
Types of liquor licenses in Texas
As TABC oversees every aspect of alcohol production, distribution, and sales in Texas, they offer many licenses depending on the type of business you want to open and the kinds of alcohol you wish to make or serve.
For those in the food service industry, the three licenses you’ll be looking into are:
- Retail Dealer’s On-Premise License (BE): allows the sale of beer
- Wine and Malt Beverage Retailer’s Permit (BG): allows the sale of beer and wine
- Mixed Beverage Permit (MB): allows the sale of beer, wine, and spirits
Additionally, some locales in Texas require food to be provided whenever alcohol is served. If you own an eatery, you'll have no problem meeting this requirement, but you will also have to apply for a Food and Beverage Certificate (FB) from the TABC.
How long does it take to get a liquor license?
The TABC states that the approximate time to get a license is 45-60 days. However, they warn that this varies depending on your license type and the certification required by your local city and county authorities. In some situations, it can take longer than 60 days, so it's important to begin the application process as early as possible.
How much does a liquor license cost in Texas?
The cost of a liquor license varies depending on the type of alcohol you wish to sell.
- Retail Dealer’s On-Premise License (BE) - beer license: $1,100
- Wine and Malt Beverage Retailer’s Permit (BG) - wine and beer license: $1,900
- Mixed Beverage Permit (MB) or Mixed Beverage with Food and Beverage Certificate required (MB/FB) - beer, wine, and spirits license: $5,300
TABC licenses are valid for two years.
Additionally, your local authorities may require additional fees before your license is approved. While the TABC has put a cap on these fees, the exact price will vary depending on your business location.
Texas liquor license requirements
To receive a TABC license of any kind, you must meet the following requirements:
- Be at least 21 years of age
- Have no “moral turpitude” violations of the alcohol code in the last six months
- Have no violations of the Texas liquor and alcohol code in the past two years
- Have no felony convictions in the past five years.
- Have no tax debt
- Be able to demonstrate “good moral character”
Additionally, the city or county where you wish to do business may have local ordinances, zoning restrictions, insurance requirements, fees, standards for late-hour business operations, or even certificate of occupancy requirements.
Reach out to your City Clerk’s Office or City Secretary to learn all your local liquor license requirements.
How to get a liquor license in Texas
The TABC website has an online portal for liquor licensees and applicants called the Alcohol Industry Management System (AIMS). Everything you need to apply, including the proper forms, documents to upload, and even signs you may have to post in your establishment, can be found in AIMS. While you can still apply for a liquor license by paper, it will take significantly longer to process.
As described on the TABC website, the licensing process goes something like this:
- Complete AIMS onboarding: Using AIMS is the easiest way to get into business. Create an account and let AIMS guide you through the application process. The rest of this list will highlight some key things you’ll need to do along the way.
- Choose the license you want to apply for: BE? BG? MB? MB/FB? Find the right license or permit for your business.
- Create and register your business: All businesses register with the Texas Secretary of State and the Comptroller of Public Accounts. The Small Business Administration has resources to help you with federal registration requirements.
- Get required signs: Visit TABC’s Sign Requirements page to learn about required signs. Contact your local TABC office if you need assistance.
- Complete your AIMS application and get certifications: Complete the remaining steps in AIMS. If using paper applications—which take longer to process—you'll fill out the Prequalification Packet, Location Packet, and Business Packet. Make sure to complete the public notice, publisher's affidavit and all city, county and state certificates.
- Submit complete application: All sections must be complete, signed, and notarized. You'll also want to understand the responsibilities of your license or permit.
- Keep wait time in mind: It can take about 50 days from when TABC receives a complete application to issue a new license. Plan ahead if you’re opening a new business or location.
Should you have any questions along the way, your local TABC office can walk you through the process and answer any questions.
Texas liquor license renewal requirements
TABC licenses are good for two years and expire on the second anniversary of their issuing date. As long as your taxes are paid, you can renew online through the AIMS portal with just a few clicks
Renewal fees are as follows:
- Retail Dealer’s On-Premise License (BE) - beer license: $1,100
- Wine and Malt Beverage Retailer’s Permit (BG) - wine and beer license: $1,900
- Mixed Beverage Permit (MB) or Mixed Beverage with Food and Beverage Certificate required (MB/FB) - beer, wine, and spirits license: $2,650
Business owners may file renewals within 30 calendar days after their expiration date. A $100 late fee for each license/permit, in addition to all fees, will be required.
Note that additional fees may be due to your city or county. Contact those authorities to determine what amounts, if any, may be due.
Can a liquor license be transferred in Texas?
Liquor licenses cannot be transferred from person-to-person in Texas. If the ownership of a business changes hands, the new owner must apply for their own license or permit.
A license or permit may be transferred from one location to a new one, but only upon approval of the TABC after the holder submits an application requesting such a change.
What are employee requirements to serve alcohol in Texas?
In Texas, there are no laws requiring employee training to serve alcohol.
However, TABC strongly encourages businesses to have all their employees be TABC certified.
If you require employees to be TABC certified, you will be granted "safe harbor" should an illegal sale happen at your establishment (e.g., sales to a minor or intoxicated person).
Under the safe harbor, because all of your employees were properly trained, while the server or seller could face criminal charges for the illegal sale, the TABC will not take administrative action against your business should such a sale occur.
Texas’s liquor liability and dram shop laws
Texas is a dram shop liability state. This means that an establishment can be liable if it sold or served an alcoholic beverage to a customer who was obviously intoxicated at the time the transaction took place, and that customer went on to cause injuries and property damage due to their intoxication.
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. Unfortunately, they get into a car accident that injures the other driver while traveling home. Your business can be sued if the driver from the birthday party was over the legal limit.
What kind of insurance do you need to get a liquor license in Texas?
Like employee certification, no Texas laws require eateries to purchase business insurance, but that doesn't mean you don't need it.
Liquor Liability insurance
Should a guest leave your establishment intoxicated and cause damage or harm, you could be held responsible. Liquor liability insurance helps cover court costs, medical bills, property damage, and more in these situations.
General Liability insurance
From slips and falls to property damage to customer injury, working with the public is full of risks that general liability insurance can help protect you from.
Workers’ Comp insurance
It may not be required, but workers’ comp insurance is smart business because without it, you could end up paying out-of-pocket for an employee's medical expenses should they get injured on the job.
Commercial Property insurance
From tornados to hail to floods, the weather in Texas can wreak havoc on even the strongest building, be sure your business is protected with commercial property insurance.
How NEXT helps Texas businesses
NEXT Insurance offers customized insurance on tap. We offer liquor liability insurance alongside our general liability coverage. Small business owners can get the right amount of insurance they need to run their businesses with peace of mind.
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.
