What Licenses Do You Need to Open a Bar?

Alcohol Licenses and Permits

What’s a bar without your favorite alcohol? To sell alcohol to the public, you’ll need at least one alcohol license. It’s just one vital step to starting a business. 

Liquor Licenses

A liquor license is pivotal for any bar. But did you know there’s not just one type? From the tavern license (specific to bars and taverns) to the restaurant liquor license (where alcohol revenue is capped, often around 40% of total revenue), there are various liquor licenses for different types of establishments. Each state dictates the application process. 

Generally, the process involves proving you’re of legal age, not a lawbreaker, and, in some cases, demonstrating that the community desires your establishment. The price? It’s a wide range — around $500 in some areas, potentially soaring up to $20,000 in high-demand locales. Each state has its variations, so thorough research is vital.

Beer and Wine Licenses

If spirits aren’t on your menu and you’re sticking to beer and wine, this is your license. This is often a cheaper and quicker route than full-blown liquor licenses. But remember, while some states lump beer and wine licenses together, others have a divide, requiring separate applications for each alcohol type. As with the liquor license, delve into state-specific regulations to get a clearer picture of the requirements and application process.

Business Licenses and Permits

For many bars, liquor licenses are only part of the equation. There are more generic business licenses and permits you may need, too. It’s also important to note that these requirements apply no matter what your business type is; sole proprietorships, general partnerships, corporations, and LLCs need business licenses.

General Business License

This isn’t specific to bars — it’s a requirement for almost all businesses in some states. Think of it as your business’s birth certificate. It legitimizes your operations in the eyes of the government. Whether you get this on the state, city, or county level varies (you may even need more than one). Licensing costs can range from $25 to several hundred, depending on the locale and expected yearly revenue.

Food Service License

Planning some pub grub? Or maybe a gourmet menu? If food’s on the table at your new bar, a food service license is essential, as are food handlers permits for your employees. This isn’t just about the quality of the food but also the safety of your preparation areas, storage, and overall hygiene.

After applying, an initial inspection verifies your establishment. Following this, regular check-ins ensure ongoing compliance. Expect fees between $100 and $1,000, dependent on your location and the size of your establishment. To learn what the requirements are in your area, contact your local health department.

Entertainment License

Bars aren’t just about drinks. If you’re providing live music, hosting DJs, or even running trivia nights, this license becomes pivotal. Specificities vary — some places might require a music license for a live band but not for a jukebox. Usually, the local government dictates these licenses. Fees for entertainment or music can be as low as $50 for a one-off event or reach into the thousands for more extensive yearly permissions.

Additional Permits and Compliance

There are a few additional permits you might need to get for your bar, depending on the circumstances. Let’s walk through them. 

Tax Registrations and Permits

Since your bar will sell alcoholic beverages to the public, there’s a very good chance you’ll need to get a sales tax license from your state’s revenue department. You’ll probably also have to register for your state’s liquor tax, too. Registering for these taxes helps ensure that your business can collect and remit all the alcohol and sales taxes due to the state in a compliant manner.

In a similar vein, you might apply for a resale certificate. The resale permit enables you to purchase goods without sales taxes if you’re going to be selling them to someone else. Typically, if your state allows this permit type, you can get it through your Department of Revenue.

Beyond that, there’s a good chance you’ll need to get an employer identification number (EIN) from the IRS. It’s often required to hire employees, pay taxes, open business bank accounts, and more. Any bar owner can apply for an EIN for free online, or our employer identification number service can help you get one hassle-free.

Building and Zoning Permits

Your ideal spot in the heart of the city might seem perfect, but is it zoned for business use? Bars often need to fit into commercial zones, but there are exceptions and intricacies.

If you’re planning renovations, construction regulations come into play. You might need special permits for certain types of construction, from modifying exits to building an outdoor patio. Costs can be nominal (around $50) or leap into the thousands, depending on your project’s scope. Typically, zoning permits are handled on the city or county level, so you’ll need to consult with your local government to learn what permit requirements are in your area.

Health and Safety Permits

These aren’t just tied to food. Your entire establishment must be safe. Fire safety is paramount. Does your venue have appropriate smoke detectors, fire exits, and extinguishers? Ensure that your bar meets local fire code regulations, including occupancy rules.

Next, there are public health requirements to consider — things like restroom facilities and cleanliness. Even if your kitchen and bar areas are perfect, but the rest of the interior is a mess, you’ll find yourself going against local health codes. That’s why getting a building health permit is essential.

Typically, health permits are administered by your state’s health department. The application process varies by state, but it generally involves an initial inspection of your space and then ongoing inspections (sometimes at regular intervals and sometimes on a random basis). And, of course, the fees vary. Consult with your local authorities to learn the specifics of how to get health and safety permits.

Signage Permit

That neon sign in front of your bar that beckons patrons inside probably needs a permit, too. Local jurisdictions typically have rules for what signage you can use. Common regulations often cover size, brightness, placement, and even flashing frequency. Ultimately, though, requirements vary from one location to another.

Before you invest hundreds or even thousands into a masterpiece of a sign, ensure you’re compliant with local laws. Fees can be minimal (around $20) or shoot up based on your sign’s size and location. You’ll have to check with your local government for more information on specific rules and the application process.

State-Specific Requirements

We’ve hammered this home, but it bears repeating: state laws are paramount for licenses and permits. And it’s up to you to ensure that your bar meets those requirements. Failing to do so can have serious consequences, including hefty fees or even a forced shutdown.

But don’t forget local city or county ordinances. Municipalities and counties often have unique requirements for licenses, too. Even two bars in the same state but different cities might face divergent licensing requirements. If someday down the road you open another bar in a second location, you’ll need to ensure that each bar has the right licenses and permits for its city, county, and state. Always do localized research in addition to state research to help ensure you don’t miss any required licenses.

Staying Compliant

Getting all of the licenses you need for your bar is only half the battle. You have to keep those licenses up to date, too. Some business licenses require annual or biennial renewal, while other permits don’t expire. Some licenses might require you to prove that you’re continually passing inspections.It’s your responsibility to renew your licenses before they expire. Keeping track of these requirements can be tough, though. If you need help staying compliant, our Worry-Free Compliance program can help.

Wrapping Up

Embarking on the bar business journey can be thrilling. But as with any business expedition, preparation is key. By understanding requirements from state business licenses and liquor licenses to the nuances of signage permits and health codes, you arm yourself against potential pitfalls. Put in the legwork now, and you’ll be well on your way to running a compliant, thriving local bar.