Opening a bar, restaurant, package store, brewery, or distillery means clearing two separate government reviews before a single bottle can legally be sold. The first is federal, run by the Alcohol and Tobacco Tax and Trade Bureau (TTB), and the second is a state alcoholic beverage control license, usually paired with a local approval step. Both layers look closely at who is behind the business, not just the business name on the application. Employers and prospective owners who understand what each layer actually reviews can avoid costly delays.
The federal layer: the TTB basic permit
Businesses that produce, blend, rectify, bottle, import, or wholesale alcohol at the federal level generally need a TTB basic permit before they can operate, in addition to any state license. Most neighborhood bars and restaurants that only sell to the public do not need their own federal permit, but distilleries, wineries, breweries, importers, and wholesalers do. TTB explains that certain alcohol and tobacco businesses must receive federal approval before engaging in business, in addition to obtaining the state licenses and permits required for their location.
The basic permit process is governed by the Federal Alcohol Administration Act. Under that law, the government can refuse a permit to a person, or to a corporation whose officers, directors, or principal stockholders, has been convicted of a felony under federal or state law within five years of the application, or convicted of a misdemeanor under a federal liquor law within three years of the application. A permit can also be denied if the applicant is not likely, based on business experience or financial standing, to run the operation lawfully, or if the proposed operations would violate the law of the state where the business sits. This standard is set out in 27 U.S.C. 204. Because the statute reaches officers, directors, and principal stockholders of a corporate applicant, the federal review is not limited to whoever signs the paperwork.
The state layer: alcoholic beverage control licensing
Every state runs its own alcoholic beverage control (ABC) agency or liquor authority, and each sets its own licensing rules, application forms, and grounds for denial. State law varies considerably here, so a rule that applies in one state will not necessarily apply in another. What is consistent across most states is the structure: an application discloses every person with an ownership or management interest, the agency investigates those individuals, and the agency can deny or revoke a license based on criminal history, character, or false statements on the application.
California’s ABC states plainly that it may refuse to issue a license to any person who has violated the Alcoholic Beverage Control Act, has a disqualifying criminal record, or is otherwise disqualified. California law also requires the department to conduct a thorough investigation of both the applicant and the proposed premises before a license can issue. California Business and Professions Code Section 23958 directs the department to investigate whether the applicant and premises qualify for a license and to look into matters that may affect the public welfare and morals. That same code section requires notice of a new or transferred license to be mailed to local law enforcement, so a police chief, sheriff, or district attorney has a window to weigh in before the license is granted.
Texas runs its licensing and permitting through the Texas Alcoholic Beverage Commission (TABC). An applicant has to complete an application, get certifications from the relevant city, county, and state offices, and in many cases post a public notice sign for a set period before a license or permit will issue. TABC’s own guidance walks through the application steps, including local certifications, the public notice sign, and typical processing time, and notes that a license or permit generally has to be renewed every two years.
New York issues liquor licenses through the State Liquor Authority (SLA), which groups licenses into four categories: on premises, off premises, manufacturing, and wholesale, with a different set of requirements for each. SLA states that its review process currently runs roughly 22 to 26 weeks for most applications, though many retail and manufacturing applicants can qualify for a temporary operating permit that allows the business to open sooner while the full application is still pending.
| Layer | Who runs it | What it typically covers |
|---|---|---|
| Federal | Alcohol and Tobacco Tax and Trade Bureau | Basic permit for producers, importers, and wholesalers; felony and liquor law misdemeanor disqualifiers reaching officers, directors, and principal stockholders |
| State | State alcoholic beverage control agency or liquor authority | License application, disclosure of owners and managers, character and criminal history investigation, denial or revocation grounds set by state law |
| Local | City or county government, and often local law enforcement | Zoning approval, health and fire code sign off, public notice requirements, and in some states formal notice to local police and prosecutors |
Who gets checked on the ownership side
State applications generally ask for the identity of everyone who holds a meaningful ownership stake or management role in the business: corporate officers and directors, LLC members and managers, general partners, and often anyone holding a set percentage of equity. Some states also reach silent investors above a disclosure threshold. The exact cutoff, and exactly who counts as a “person of interest” or “true party of interest,” is defined differently from state to state, so the same investor structure that clears review in one state may need restructuring in another.
This ownership level review is separate from the screening that applies to the people who will actually pour drinks or check IDs behind the bar. Bartenders and servers are usually covered by their own state certification or responsible beverage service training rather than the ownership licensing process, and employers still need their own hiring screen for those roles. A related look at that side of the business is in Reveal Background’s guide on bartender background checks.
What typically disqualifies an applicant
Because state law varies, no single list applies everywhere, but a few themes show up across most states’ statutes and agency guidance:
- A felony conviction, particularly one involving violence, fraud, or a liquor law violation, within the lookback period set by that state or, at the federal level, within five years under 27 U.S.C. 204.
- A prior license revocation or a pattern of serious violations at another licensed premises tied to the same owners.
- Undisclosed ownership interests or a false statement on the license application itself.
- Unresolved tax delinquency or failure to meet the state’s financial responsibility requirements.
- A proposed location that does not meet zoning, distance from schools or churches, or other local restrictions.
None of this means every past conviction automatically closes the door. Many states allow a hearing, an appeal, or an individualized review of the circumstances, and rules on how far back a state will look, and which offenses matter, differ by jurisdiction. Applicants and employers should not assume a specific outcome and should confirm current requirements directly with the licensing agency for the state and municipality involved.
Building this into a business screening plan
For a company opening a licensed venue, the liquor license review runs alongside, not instead of, ordinary pre-employment screening. Owners and key managers named on the license application should expect the state’s own investigation, which can include a review of criminal history and prior licensing record. Separately, the business still needs to run its own compliant background checks on the staff it hires, including anyone handling cash, driving for the business, or managing inventory. Reveal Background’s background screening platform supports that side of the process for employers building out a new licensed location. Licensing patterns in other regulated industries follow a similar structure; Reveal Background’s guide to cannabis industry background checks covers a comparable state by state licensing model for a different regulated product.
Frequently asked questions
Does every bar or restaurant need a federal TTB permit?
No. A federal basic permit is generally required for producers, such as distilleries, wineries, and breweries, along with importers and wholesalers. A retail bar or restaurant that only sells to consumers typically only needs the state and local licenses, though the safest step is to confirm directly with TTB and the applicant’s state ABC agency for the specific business model involved.
Can a past felony conviction keep someone off a liquor license application?
It can, but the outcome depends on the state, the offense, and how long ago it occurred. Federal law can bar a basic permit based on a felony conviction within five years or a liquor law misdemeanor within three years, reaching officers, directors, and principal stockholders of a corporate applicant. States set their own separate standards, so an applicant should check the specific agency’s current rules rather than assume any single national rule applies.
Who has to be disclosed on a liquor license application?
Most states require disclosure of officers, directors, LLC members and managers, general partners, and often anyone holding a meaningful ownership percentage. Some states also reach silent investors above a certain threshold. The exact definition of who counts as an owner for licensing purposes varies by state.
Are bartenders and servers background checked the same way as owners?
Generally not. Ownership level licensing review, run by the state ABC agency, is separate from the certification or training many states require for bartenders and servers, and separate from the employer’s own hiring background check on staff.
Does a liquor license background check use fingerprints?
Some states incorporate a criminal history review as part of the license investigation process, and the method varies by agency. Because state procedures differ, applicants should confirm the exact process, including whether fingerprinting is required, with the licensing agency in the state where they are applying.
How long does a liquor license background review take?
It varies widely by state and license type. Some agencies report review windows measured in weeks, and some offer a temporary operating permit while the full review is pending. Applicants should check current processing times directly with the relevant state agency rather than assume a fixed schedule.
This article is general information, not legal advice. Liquor licensing rules vary by state and locality and change over time, so confirm current requirements with the relevant federal, state, and local agencies before applying.
