In most places in Ohio, a new liquor license from the State is not available. When a new bar or restaurant wants to open, but they are unable to obtain a new license from the State, generally their best option is to purchase a liquor license and transfer it to their business. There are a number of steps that must be taken and potential issues that can arise relating to the transfer of a liquor license.
Every sale of a liquor license is a private sale between two parties. There’s no central clearinghouse for the sale of liquor licenses, so finding a seller can often be difficult. One of the best places to start looking is on the “Safekeeping” list. When a bar or restaurant in Ohio loses its lease or goes out of business, they can put their liquor license in Safekeeping for up to one renewal cycle. The renewal cycles vary across the State, so be sure to check the county in which the license is located to determine when the license will need to be renewed. Another option is to find a liquor attorney or broker. They will often be able to locate a license in the shortest amount of time, but there are often legal and brokerage fees associated with the transaction.
When writing the sales contract, it is important to remember that you can’t just purchase a liquor license by itself. Some assets of the business must be sold along with the liquor license. Often times the inventory of a business or furniture and fixtures accompany the sale.
A common problem involving the transfer of liquor licenses is back taxes. If there are any taxes due on the permit, especially unpaid sales taxes, the Ohio Department of Taxation will not allow the permit to transfer. It is always a good idea to escrow the majority of the purchase price to apply to any back taxes, if any arise, when purchasing a liquor license. Escrowing the purchase price can also prevent complications if one party wants to abandon the transaction later. During a transfer, either party can cancel the transfer unilaterally at any time.
At J. Thomas Hodges and Associates, our experienced attorneys will help you select the right license for your small business. Call 513-421-8454 for a consultation and ask for Brad Thomas.