New York Liquor License FAQs – Part 2

What are the two major retail liquor license types in New York?

Retail licenses may be “on-premises” or “off-premises”. If you hold the former, you may only serve alcohol to patrons for consumption at your premises. If you hold the latter, you may only sell alcoholic beverages to be consumed somewhere else.

Once a liquor license is obtained, is it necessary to file other applications with the State Liquor Authority?

Even when you already in possession of your license, you may be required to file new applications with the SLA under certain circumstances, such as:

• Alterations: if you are planning on making changes to the premises, you may need to notify, and in certain cases obtain the approval, of the New York State Liquor Authority (SLA). In case of minor alterations – those that do not materially affect the structure or character of the premises and do not involve expenditures in excess of $10,000 – only the notification to the SLA is required, but not the approval. In case of substantial alterations – those that involve a cost in excess of $10,000 and that materially affect the character and / or the physical structure of the premises, such as relocating an entrance or a bar, installing a stage or a dance floor, closing an existing entrance or opening a new one etc. – you must obtain the SLA’s prior approval. In case of substantial alterations, if you have an on-premises license and you are located in New York City you must notify your local Community Board before applying with the SLA.
• Corporate Changes: New York State Liquor Authority’s approval is typically required prior to a change to the ownership structure of the corporation or limited liability company, or prior to a change in the stock held by any of the shareholders or members. Approval will not be required if there are ten or more shareholders or members and: (i) the change involves less than 10% of the interest in the business; (ii) none of the existing shareholders or members with less than a 10% interest increase their interest or shares in the company to 10% or more. If the license is held by a corporation or limited liability company, the SLA approval is also required prior to adding or removing an officer or director of the corporation; or adding or removing a managing member of the limited liability company. If you hold an on-premises license in New York City (Manhattan, Brooklyn, Queens, Bronx and Staten Island), the local Community Board should be notified prior to filing any application to make a “substantial corporate change”, which means a change of 80% or more of the officers and/or directors and or managers of the company, or a transfer of 80% or more of shares of a corporation or membership interest in a limited liability company.
• Changes in method of operation: method of operation includes hours of operation, type of music played at the premises, presence of security personnel etc. If anything changes as to the foregoing, licensees must seek SLA’s prior approval.
• Removal or Change of Location: if the location of the licensed business changes, the license cannot be used at the new location without SLA’s prior approval. The so-called removal application is basically a brand new application, which also requires the usual 30 day notice to the Community Board. Refrain from moving to a new location before you have obtained a new license or a temporary permit – if allowed.
• Renewals: each time your license is subject to renewal (every year, every other year or every three years depending on the type of liquor license), approx. 20 – 30 days before expiration you must file a renewal application with the SLA. The application is quite straightforward. If your license is an on-premises you must also notify the Community Board with the typical 30 day notice.
• Upgrades: if you wish to upgrade your license class (for instance from RW to OP), you will need to file an upgrade application with the SLA and, prior to that, notify the Community Board. Basically, an upgrade application is a brand new application that will undergo the same process and will take the same time as the initial application.

Must food be available to patrons if you hold an on-premises license?

Yes. Either you operate a restaurant with a full kitchen or a pub or tavern or lounge with a limited kitchen, you must be able to serve food to your patrons, whether it’s a full meal or simply sandwiches, soups or similar (but snacks is not sufficient). Food should be prepared at the premises, no food from the outside is allowed. In case of a hotel license, a food establishment should be present in the building although it is not required to be operated by the same hotel owner, as it may also be operated by a third party.

Are there restrictions regarding hiring employees?

Felons: typically, on-premises licensees are barred from hiring people with a prior felony conviction, unless they obtain the prior approval of the SLA, or they can show a civil relief certificate from liabilities and the like.

Minors: the general rule is that underage persons (younger than 18 y.o.) cannot be hired to sell, serve or handle alcohol. Exceptions include on-premises licensee employing minors under the direct supervision of an 18 y.o. person or older.

Police Officers: on-premises licensed businesses cannot employ police officers, as well as wine stores. In a few instances a police officers may work under permission of his/her precinct.

Are there restrictions regarding hours of operation?

Yes, ABC law provides that package or wine stores must close at certain times of the day depending on the day of the week. For more details check ABC Law § 105 (14) here. On-premises licensed businesses will be typically subject to stipulations entered with the Community Board or the SLA at the time of the initial application.

Where and from whom can I buy alcohol as a retailer?

A New York licensed retailer may buy alcohol only from wholesalers or manufacturers licensed in the state of New York. Alcohol cannot be bought from a business located in a state other than New York. A retailer is not permitted to purchase alcoholic beverages from another retailer except when the retailer is selling the entire inventory under a liquidator’s permit.

What about payments and prices?

Payments for purchased alcohol may be in cash, checks or electronic transfers, while credit cards are not permitted. However, payments on credit may be offered by wholesalers. Failure to pay on time when the sale is on credit will result in your business being placed on the delinquent list maintained by the SLA until the debt is repaid in full, during which time you can only purchase alcoholic beverages in cash. Wholesalers and manufacturers may only sell wine and liquors at the prices they have previously posted with the SLA.

What is a Surety Bond?

A surety bond is required each time a new liquor license is issued and then upon each renewal thereof. Bonds are issued by specialized bonding companies and are used to guarantee payments of penalties imposed upon licensed businesses by the SLA for violations of the ABC Law. The validity of the bond must be for the entire term of the license. In case of retailers, the amount insured by the bond is $1,000; however the fee the retailer will pay as a premium for the issuance of such bond is approx. $50.00 per year.

May I sell or permit customers to consume alcohol outside the premises?

No, you may not, except if you are an on-premises licensee and you have obtained a caterer’s permit for special events. If you are an on-premises licensee, you shall not permit off-premises consumption nor shall you allow customers to leave the premises with an alcoholic beverage, unless you have a RW license, in which case you may allow customers to leave the premises with their unfinished bottle of wine after the meal. Off-premises licensees, to the contrary, may not allow consumption inside the premises, unless during an authorized tasting event.

What other rules should I be mindful of as a licensee?

• Bookkeeping: a licensee is required to keep track of all the transaction regarding the business and to keep records of all its full-time and part-time employees
• Stipulations: it is very likely that before a license is granted stipulations have been entered with the Community Board and/or with the SLA regarding method and hours of operation and similar. A licensee is required to comply with said stipulations and conditions at all times unless and until SLA authorizes otherwise.
• Disorders: a licensed business should never allow disorder (such as fights, altercations, excessive noise etc.) within the premises. Police should be call as soon as something like that occurs.
• Minors and intoxicated patrons: persons under the age of 21 or persons that are visibly intoxicated should not be permitted to purchase alcoholic beverages at the premises, whether you hold an on-premises license or an off-premises license. As to minors, it is a good practice (although not dictated by the ABC law) to request a valid form of identification. Selling to a minor or to those who are intoxicated is a disciplinary violation and may result in penalties imposed by the SLA.
• Storage: alcohol may be stored at the premises within the licensed area, or outside the premises in a storage with a warehouse permit.
• Extension of premises: alcohol may be served and/or sold only on the licensed portions of the premises. If you want a portion of your premises to be included in the licensed areas, you have to include that portion in the floor plans that are being submitted to the SLA at the time of the original application. If you have a sidewalk café and you want to be able to serve alcohol in it, make sure you include it in the floor plans. The SLA will not license your sidewalk café area unless you have obtained – and can actually produce – a sidewalk café permit from the NY Department of Consumers Affairs. If you decide to add a patio or a sidewalk café after your original license has been issued, you will be required to file an application for alteration with the SLA, notifying the community board if your licensed business is located in New York City.

If you want to keep reading about liquor license topics, check here our article New York Liquor License FAQs – Part 1.

If you are seeking information on how to start a restaurant business in New York, check here our article How to open a restaurant in New York (& United States).

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A liquor license application in New York is a lengthy and difficult process.  Click here for a free consultation with our liquor license attorneys at Bardazzi Law Pllc.