Opening a bar, restaurant, or retail store that sells alcohol in Texas requires one essential legal step: obtaining a liquor license. The process is not only highly regulated by the state but also comes with fees that vary depending on the type of alcohol you plan to sell, the nature of your business, and the location of your establishment. Understanding the costs of a liquor license in Texas is critical for business planning, budgeting, and ensuring compliance with the law.
This guide breaks down the fees, categories, and related expenses tied to liquor licenses in Texas. It draws from the latest Texas Alcoholic Beverage Commission (TABC) regulations and provides clear, factual information without speculation.
Costs of a Liquor License in Texas
The cost of a liquor license in Texas varies significantly depending on several factors, including:
- Type of License or Permit (e.g., mixed beverage, beer & wine retail, package store)
- Duration (most licenses are issued for two years)
- Local Fees (cities and counties may add fees)
- Business Category (restaurants, bars, grocery stores, or wholesalers)
The Texas Alcoholic Beverage Commission (TABC) administers all permits, and the state maintains a set fee schedule. Below is a structured breakdown of the most common types of licenses and their associated costs.
Common Liquor License Types and Their Fees
| License Type | Description | State Fee (Approx.) | Duration | Notes |
|---|---|---|---|---|
| Mixed Beverage Permit (MB) | For businesses selling mixed drinks with distilled spirits | $6,000 initial, $3,000 renewal | 2 years | Requires surcharge and gross receipts tax |
| Mixed Beverage Restaurant Permit (MBR) | Restaurants selling liquor alongside food | $3,000 initial, $1,500 renewal | 2 years | Must maintain food-to-liquor sales ratio |
| Wine and Beer Retailer’s Permit (BG) | Restaurants or bars selling beer and wine only | $1,000 – $2,000 | 2 years | Does not allow sale of distilled spirits |
| Package Store Permit (P) | Liquor stores selling packaged alcohol for off-premise consumption | $2,500 – $3,000 | 2 years | Strict ownership rules apply |
| Retail Dealer’s On-Premise License (BE) | Bars and establishments selling beer only | Around $1,000 | 2 years | Limited to beer, no wine or spirits |
| Retail Dealer’s Off-Premise License (BF) | Grocery or convenience stores selling beer for off-premise consumption | Around $1,000 | 2 years | Limited to beer, no wine or spirits |
| Private Club Registration Permit (N) | Private clubs serving alcohol to members | $750 – $2,000 | 2 years | Membership system required |
| Distributor’s or Wholesaler’s License | For suppliers or distributors of alcohol | Varies ($1,500 – $10,000+) | 2 years | Applies to wholesale operations |
Note: Fees are set by the state but may also include additional county or city charges. Always confirm with the Texas Alcoholic Beverage Commission (TABC) and local authorities.
Additional Costs Beyond the State Fee
When calculating the true cost of a liquor license in Texas, business owners should account for more than just the TABC fee.
- Local Fees – Counties and municipalities may charge additional fees, sometimes equal to half of the state fee.
- Renewal Fees – Most permits are valid for two years. Renewal fees are often slightly lower than the original application cost.
- Surcharges and Bonds – Certain permits, like mixed beverage licenses, require surcharges and gross receipt taxes.
- Application Processing Fees – The TABC requires application fees to cover administrative costs.
- Professional Assistance – Many businesses hire licensing consultants or attorneys to navigate the complex paperwork, which can add hundreds or even thousands of dollars.
Detailed Breakdown of Key License Types
Mixed Beverage Permit (MB)
The Mixed Beverage Permit (MB) is one of the most common and also one of the most expensive liquor licenses in Texas. It allows the holder to sell distilled spirits, beer, and wine for consumption on-premises.
- Initial Fee: $6,000
- Renewal Fee (every 2 years): $3,000
- Additional Costs: Surcharge of $600 plus a 6.7% gross receipts tax on alcohol sales
This license is typical for bars, nightclubs, and restaurants that serve liquor in cocktails. It requires compliance with strict rules and is heavily regulated.
Mixed Beverage Restaurant Permit (MBR)
Designed specifically for restaurants, the MBR permit is less costly than the full mixed beverage permit.
- Initial Fee: $3,000
- Renewal Fee: $1,500
- Requirement: At least 51% of revenue must come from food and non-alcoholic beverages
This category makes it possible for dining establishments to serve cocktails without being classified as a bar.
Wine and Beer Retailer’s Permit (BG)
For establishments that only sell beer and wine, the BG permit is a more affordable option.
- Fee Range: $1,000 – $2,000 (depending on location)
- Duration: 2 years
- Limitation: Cannot sell distilled spirits
Common holders of this license include family restaurants, small bars, and cafés.
Package Store Permit (P)
The Package Store Permit allows businesses to sell packaged liquor for off-site consumption.
- Fee Range: $2,500 – $3,000
- Duration: 2 years
- Restrictions:
- A person cannot own more than five package stores in Texas.
- No liquor sales on Sundays before noon.
These permits are typically held by liquor stores, large retail chains, and specialty shops.
Private Club Registration Permit (N)
Texas has a unique law requiring some private clubs to hold a permit in order to serve alcohol to members.
- Fee Range: $750 – $2,000
- Duration: 2 years
- Requirement: Must operate under a private membership system
This permit is common in dry counties or areas with local restrictions where businesses cannot openly sell alcohol.
Retail Dealer’s Licenses (Beer Only)
There are two common types for businesses dealing exclusively with beer:
- Retail Dealer’s On-Premise License (BE): For bars or taverns selling beer to customers onsite.
- Fee: Around $1,000
- Retail Dealer’s Off-Premise License (BF): For grocery and convenience stores selling beer for offsite consumption.
- Fee: Around $1,000
These are among the least expensive alcohol-related permits in Texas.
Local and County-Level Fees
Texas law allows counties and municipalities to impose additional fees on top of state licensing costs. Typically, local fees can equal up to half of the state fee. For example:
- A business paying $6,000 for a state mixed beverage license could face an additional $3,000 from local authorities.
- Grocery stores with a $1,000 beer license may pay another $500 locally.
These costs vary widely by county and city, so it is crucial to confirm with both the TABC and local officials.
Renewal and Ongoing Costs
Most liquor licenses in Texas are valid for two years. Renewal fees are generally lower than initial application fees but still represent a significant ongoing cost.
For example:
- MB License: $6,000 initial → $3,000 renewal every 2 years
- MBR License: $3,000 initial → $1,500 renewal every 2 years
Additionally, businesses must budget for:
- Gross Receipts Taxes (for mixed beverage permits)
- Surcharges (like the $600 surcharge on MB licenses)
- Compliance Costs (staff training, record-keeping, inspections)
Factors That Influence Liquor License Costs
While the state sets base fees, several factors influence how much a Texas business ultimately pays:
- Business Type – Restaurants generally pay less than nightclubs or bars.
- Location – Urban centers like Dallas, Houston, and Austin often have higher local fees.
- Alcohol Category – Licenses allowing the sale of spirits are significantly more expensive than beer-and-wine-only permits.
- Dry vs. Wet Counties – Some counties in Texas have restrictions, requiring private club permits instead of traditional licenses.
Why Costs Vary Across Texas
Texas has a long history of local control over alcohol sales. Many counties and cities have their own ordinances, meaning a liquor license cost in Houston may differ from that in Lubbock or Amarillo. Businesses must navigate both state-level requirements (TABC) and local-level regulations.
This dual structure explains why two identical businesses may face different licensing costs in different parts of Texas.
We’ve covered the main categories of liquor licenses in Texas, their costs, and how local fees can increase the total expense. To complete this in-depth guide, let’s look at the application process, tax obligations, county-level variations, compliance costs, and finally compare Texas to other states. This will give you a full picture of what it truly costs to obtain and maintain a liquor license in the state.
Step-by-Step Application Process and Costs
Applying for a liquor license in Texas is not as simple as filling out one form. The Texas Alcoholic Beverage Commission (TABC) has created a structured process that includes state requirements, local approvals, and detailed background checks. Each of these steps can involve fees.
1. Determine the Right License Type
The first step is identifying which permit fits your business model. Restaurants, bars, clubs, and retail outlets all require different permits. Choosing the wrong license type can lead to rejection and lost fees.
2. Submit Application Through AIMS (TABC’s Alcohol Industry Management System)
- Applications are filed through TABC’s AIMS portal.
- The state charges a processing fee, usually a few hundred dollars, separate from the license cost.
3. Obtain Local Approvals
Before the TABC issues a license, businesses must receive approval from:
- City Government (if inside city limits)
- County Government
- Local Law Enforcement
These steps may involve additional fees for zoning verification, public notice postings, and local application costs.
4. Publish a Public Notice
Texas law requires businesses to post notice of their intent to sell alcohol. Newspaper publication or similar announcements may cost between $100 and $300, depending on the area.
5. Background Checks
- Owners and key stakeholders must undergo background checks.
- Fees vary but are typically $25–$50 per person.
6. Inspections
The TABC or local health departments may conduct site inspections before approval.
- Inspection fees can range from $50 to $500, depending on jurisdiction.
7. Pay State and Local Fees
Once approved, the applicant pays the full state license fee plus any local county or city fees.
Example: Application Cost Breakdown for a Restaurant in Dallas
- Mixed Beverage Restaurant Permit (MBR): $3,000
- TABC Processing Fee: $300
- Local Fee (up to half of state fee): $1,500
- Public Notice Posting: $150
- Background Checks (2 owners): $100
- Inspection Fee: $200
Total Initial Cost: ≈ $5,250
This example shows how additional charges beyond the state license fee can raise the true cost of getting a liquor license in Texas.
County-by-County Cost Variations
Texas allows local governments to set additional fees. This means that while the state fees are fixed, the overall expense differs by county or city.
Example Comparisons
- Harris County (Houston):
Local fees are consistently charged at the maximum (half of state fee). A $6,000 mixed beverage permit will add another $3,000 locally. - Travis County (Austin):
Similar structure, though enforcement and inspection fees may add extra. - Bexar County (San Antonio):
Fees mirror the state’s half-rate rule, with additional costs for zoning and safety compliance. - Smaller Counties (e.g., Midland, Lubbock):
Some areas have fewer local fees but may require private club permits due to dry or semi-dry laws.
This variation is why two restaurants with identical operations may face very different licensing costs depending on location.
Taxes and Surcharges
Owning a liquor license in Texas comes with ongoing tax obligations beyond the license fee.
Mixed Beverage Gross Receipts Tax
- Applied to businesses with mixed beverage permits.
- Rate: 6.7% of gross receipts from alcohol sales.
Mixed Beverage Sales Tax
- Applied at the point of sale to consumers.
- Rate: 8.25% (same as Texas sales tax rate).
Example Calculation
A bar in Austin with $500,000 in annual alcohol sales:
- Gross Receipts Tax: $33,500
- Sales Tax Collected: $41,250 (passed to the state)
This demonstrates how ongoing tax costs can far exceed the initial license fee.
Compliance and Penalty Costs
Operating with a liquor license in Texas also means accepting responsibility for compliance. Failing to follow the rules can lead to fines, suspensions, or even license revocation.
Common Compliance Costs
- TABC Certification Training: Required for employees who sell or serve alcohol. Costs around $10–$20 per employee.
- Recordkeeping Systems: Businesses must track inventory and sales accurately. Many use compliance software costing $500–$2,000 annually.
- Legal Consultation: Businesses often retain lawyers to ensure ongoing compliance, especially for larger establishments.
Penalties for Violations
- Selling to minors: Fines up to $4,000 and possible jail time for the employee.
- First offense for overserving: License suspension and fines of $1,000–$2,000.
- Repeat offenses: Possible revocation of license.
Thus, compliance costs should be factored into the total “price” of holding a liquor license.
How Texas Compares to Other States
Texas liquor license fees are generally considered moderate to high compared to other states.
- California: Liquor licenses can exceed $13,000 for full-service bars due to population quotas.
- New York: Fees range from $4,000–$5,000, with heavy regulatory requirements.
- Florida: Package store licenses can exceed $100,000 due to limited availability and resale markets.
- Texas: Most common licenses fall between $1,000 and $6,000, plus local fees.
In short, Texas sits in the mid-range nationally, though local fees and taxes add significant costs.
Key Considerations Before Applying
When budgeting for a Texas liquor license, consider these critical points:
- Type of License Matters Most: Beer-and-wine permits are far cheaper than mixed beverage permits.
- Local Fees Add Up: Always check with your city and county, not just the TABC.
- Taxes Are Ongoing: Mixed beverage permits bring long-term tax obligations that often surpass the license fee.
- Compliance is Costly but Necessary: Training, software, and legal guidance are investments in avoiding penalties.
Conclusion
The costs of a liquor license in Texas go far beyond the headline state fees. While the TABC sets clear base rates—ranging from about $1,000 for beer licenses to $6,000 for mixed beverage permits—local governments, compliance requirements, and taxes significantly increase the overall expense.
For many businesses, the true cost of operating with a liquor license in Texas includes:
- State License Fees ($1,000–$6,000+)
- Local Fees (up to 50% of state fee)
- Application and Inspection Costs ($500–$1,000+)
- Taxes (6.7% gross receipts + 8.25% sales tax)
- Compliance and Training Costs (varies)
By understanding these expenses upfront, entrepreneurs can make informed decisions, budget effectively, and ensure their establishments operate within Texas law.