Starting your own liquor store in Texas is not as simple as opening another kind of retail outlet. Liquor stores have their own set of specific licensing regulations in addition to all the restrictions that the state places on any retailer. You have to follow all the rules for starting a retail business, and at the same time, you must satisfy the requirements for obtaining a Texas liquor license from the Texas Alcohol Beverage Commission (TABC).

The First Steps Toward Starting a Texas Liquor Store

First of all, you need to draw up a business plan for the liquor store that will calculate your expenses and the income you expect to generate from your sales. This would include all the steps from start-up to when your store is established. That way, you and any financial institutions from which you may seek financing can see if your sales projections are being met.

When you register your new business as a partnership, sole proprietorship or corporation, the Internal Revenue Service (IRS) will issue you a federal employer identification number. The next step before acquiring your Houston liquor license is to obtain a sales tax permit from the Texas Comptroller of Public Accounts.

One of the most important decisions you can make when starting any retail outlet is the location. A liquor store depends on regular customers as well as walk-ins, so finding a high-traffic area can really make or break your store. If your store is within 1,000 feet of a public school, you will have to obtain a $10,000 bond. If it is farther than 1,000 feet, you only need a $5,000 bond. Therefore, your proximity to a any school can have a significant effect on your start-up expenses.

Once you have found your location, get a lease for the property. Before moving in, try to make the lease dependent on whether you can secure your liquor license.

Obtaining Your Liquor License

To start your own liquor store in Texas, you need to contact the TABC to set up a pre-licensing interview. Your partners, you and any potential investors must be present at the meeting. Your responsibilities will be explained, and you will receive the instructions and forms you need to apply for your license. A Texas licensing service can be a great help during this process.

You must post the notices that the TABC will provide in the window of your store for 60 days prior to receiving your liquor license if the storefront has not been used for selling liquor for the previous two years. These signs must be displayed prominently to notify the public of your pending hearing for your liquor license. Then, you can schedule an inspection of your location with the TABC.

Finding Funding

At this point, you should get a small-business loan or some other type of financing if you cannot fund the store on your own. You must show the lender your business plan so that they can feel comfortable that your plan is solid, and you will not default on their loan.

The fees for obtaining a liquor license in the Texas can vary so getting the help of a Texas licensing service can help alleviate confusion and these experts take care of the paperwork and filing. Once you have paid for your license, you need to find a good beer, wine and liquor distributor to stock your store. This may require working with a few vendors because some of the larger breweries prefer to distribute their products themselves.

Then, you will have a hearing at the county courthouse to determine if you can receive a liquor license. Local citizens may protest your location or suitability.

Once you have been approved for your license, place your first order with your distributors. The final step is to open your store and to begin conducting business.

Walmart Stores Inc. is a force to be reckoned with in the boardroom or the courtroom. Their most recent legal obstacle involves various Texas liquor license laws that prevent the company from selling hard liquor in addition to the wine and beer that its stores already stock throughout the state. On February 12, 2015, Walmart and Sam’s Club sued the Texas Alcoholic Beverage Commission (TABC) in federal court. The lawsuit challenges the constitutionality of rules that regulate package store permits.

As plaintiff, Walmart alleges that the rules violate sections of the Constitution that relate to commerce, equal protection and comity, a legal principle that requires Texas to uphold federal laws. Although Walmart would not agree to interviews with an Austin TV station, company spokesman Lorenzo Lopez did provide a written statement. He said that current laws are “counter to Texas’ belief in free enterprise and fair competition.” He added that it “limits our customer’s choice and keeps the price of spirits artificially high.” In the lawsuit, Walmart expressed similar issues by saying that the laws are “irrational, unnecessary and unfair” and “harmful to Walmart’s profits.”

To win the right to sell hard liquor in the state, Walmart must successfully change multiple aspects of the law. First, the TABC does not allow publicly traded corporations with more than 35 shareholders to sell alcoholic spirits. Second, a single company is limited to five package store permits. Walmart currently has 543 wine and beer retailer’s off-premise permits in Texas. Third, rules prevent companies from holding wine and beer permits together with package store permits. If parts of the law change, Walmart could abandon its current permits and apply for 543 new BF beer licenses and 543 new Q permits for selling wine. This option would cost the company an additional $1.3 million. If Walmart were granted package store permits, it would need to build free-standing package store outlets as well.

Walmart has also questioned long-standing loopholes that allow immediate relatives of permit holders to secure an unlimited number of additional permits. This unlimited consolidation loophole can be used legally by any Houston liquor license service. In many ways, current laws support family-owned businesses and protect small companies from competition against national retailers and big box stores. Independent liquor store owners are concerned about what will happen if these laws fall. Sam Issa, who owns a liquor store in Austin’s Allandale neighborhood, said that many family-owned businesses will shut their doors forever. He added that if business slowed, he would not be able to support the same number of employees. His workers would be forced to give up the higher pay offered by independent stores and accept minimum wage if they went to work for Walmart. Issa is also concerned that the state might open the door for everyone to sell liquor, including Walmart, Target and CVS.

This groundbreaking lawsuit is just part of Walmart’s campaign to change laws that regulate the distribution of liquor licenses. The company is also lobbying members of the legislature in a major push to secure an additional Texas alcoholic beverage license for each superstore in the state. Whether or not the suit is successful, this is a big move for the nation’s largest retail chain. Walmart currently has licenses to sell hard liquor in 25 states. However, more Walmart stores and affiliates are located in Texas than in any other part of the country. Walmart’s quest to increase profits at such a large number of stores could open new sales avenues for other national chains while forcing smaller stores to close or keep up with a level of competition that the Texas liquor industry has never seen.

Craft beer breweries in Texas may not be contacting a Houston liquor license service until the latest brew-ha-ha over distribution is resolved. Texas has recently enacted legislation that prevents craft breweries from collecting fees from distributors for the privilege of selling their popular craft beers throughout Texas. This law would effectively force these independent brewers to give up millions of dollars in fees to beverage distributors who have connections to politicians. Naturally, the breweries are fighting back by suing the state over the new alcohol regulations.

Actually, this is not a new law. It was passed back in 2013 and forbade brewers from accepting any compensation from distributors. The lawsuit questions the constitutionality of forcing the brewers to donate a portion of their business to the distributors. The law also curtails the variety of craft beers that consumers in Texas can purchase. The result is that many craft breweries have put plans for expanding their operations on hold. New startup breweries will likely wait until the lawsuit is decided instead of applying for their Houston alcoholic beverage license or a Texas liquor license. That will also curtail revenue the state would love to receive.

Three Texas brewers teamed up with the Institute for Justice (IJ) to challenge the law. The proprietors of Revolver Brewing, Live Oak Brewing and Peticolas Brewing Company are merely trying to protect the businesses that they built from scratch.

Prior to the law’s passing, brewers were paid by their distributors for the right to market their beers in cities across Texas. This law has created a sudden, unexpected source of profit for the distributors. What makes the situation even worse is that the distributors can sell the rights for distribution to other distributors who cover areas other than major Texas cities like Houston, Dallas or Austin. Previously, brewers used those funds from the distributors to grow their businesses.

Matt Miller, the managing attorney for the Texas office of the IJ, said that the law could be compared to forcing authors to donate the rights to their books to their publishers. He believes that it was unconstitutional to hand over the brewers’ property to other businesses that neither earned nor deserved the right to charge others to distribute craft beers.

The president of Live Oak Brewing, Chip McElroy, said that he was honored to be involved in the new trend toward craft beer. He has dedicated 18 years to building his business, but the new law forced him to pull his product from beer stores in San Antonio, Dallas-Fort Worth and areas of Texas where consumers have been able to buy Live Oak beer in the past.

Live Oak Brewing and Revolver Brewing are based in Fort Worth. The other participant in the suit, Peticolas Brewing, is in Dallas. The law has clouded their ability and desire to expand their operations. However, the property rights and economic liberties of entrepreneurs are protected by the Texas Constitution. The lawsuit is seeking to overturn the 2013 legislation so that the breweries can maintain control of their businesses.

The lawsuit is one of several included in the IJ’s so-called National Food Freedom Initiative. Its intention is to challenge laws across the United States that hinder the rights of citizens to make, sell, buy and consume foods of their own choice. The IJ has already won a free speech challenge against a law in Oregon prohibiting the advertising of raw milk. Presently, the IJ is involved in other lawsuits over the right to sell homegrown vegetables in Miami Shores, Florida, and home-baked treats in Minnesota. They are also challenging a Florida law that bars using the name “skim milk.”

Are you looking to buy an alcoholic beverage in the Lone Star State? Unfortunately, it is not as simple as heading to the nearby grocery store or restaurant as the laws in Texas vary significantly from county to county, city to city and even block to block. Businesses looking to secure a Texas alcoholic beverage license will unfortunately find the process difficult or impossible in many places as 11 of the state’s 254 counties are completely dry, and 194 are partially dry.

Plano, which is situated mostly in Collin County about 20 miles north of Dallas, has been one of the more interesting cities as far as confusing laws go. Fortunately, those laws were simplified with the recent opening of the city’s first liquor stores. Prior to that point, you had to visit one of the city’s grocery stores that sold beer and wine to pick up alcoholic beverages; those were located in the newest 40 percent of Plano’s 72 square mile metro area.

Patrons who had visited restaurants in Plano were required to join a private club prior to ordering alcoholic beverages. This is still the case in a variety of communities throughout Texas, and it can cause quite a bit of confusion and sometimes frustration to those not expecting to have to hand over a driver’s license and join a club so that alcoholic beverages may be ordered.

This process is not easy on businesses both as the cost of keeping detailed records can add up to thousands of dollars every year, and the Texas Alcohol Beverage Commission regularly performs undercover checks to ensure that the laws are being followed. The Texas Restaurant Association has been working for years to eliminate this practice, which does not appear to create any jobs, tax revenue or otherwise provide any discernible benefits.

However, many business owners looking for the services of a Houston liquor license service in order to help them acquire a Texas liquor license are located in areas that do allow open alcohol sales.

Conversely, grocery stores in dry counties lose business as shoppers will oftentimes drive to a place where they can buy alcoholic products and then do much of their regular grocery shopping there as well. In fact, for every dollar lost in beer or wine sales, it is estimated that an additional three is lost in general sales. This also impacts the amount of taxes that can then be paid by those businesses to the local city and county.

Another disturbing issue is that dry Texas counties have more than three times as many alcohol-related traffic fatalities than those that allow alcohol sales. This is due to people having to leave the county in order to purchase and consume alcohol and then making the mistake of driving home while impaired.

Counties generally fall into one of four categories. Some are completely dry, others only sell 4 percent beer, another county allows the sale of alcoholic beverages with up to 14 percent alcohol content while other counties sell distilled spirits. Even more confusingly, many counties and sometimes even cities fit into a variety of these categories depending on where in that locale the business is located. However, if a county is dry, cities within that county do not have the option to become wet.

One example of how little the difference can be between dry areas and wet ones occurred when a Hooters restaurant opened during Plano’s mostly dry era. It ended up being just a few feet too close to a church, and alcohol sales were not allowed. However, the business simply moved its front door in order to “move” the business far enough from the church in order to legally sell alcoholic products.