New Jersey Liquor License Rules and Requirements

If you're a business owner or entrepreneur opening a bar, restaurant, or liquor store in New Jersey serving both Ocean County and Monmouth County, understanding the liquor licensing process is the first step toward turning your dreams into reality. In the Garden State, the path to obtaining a liquor license to sell alcohol (including beer, wine, and spirits) at liquor stores, bars, and restaurants is laden with specific regulations, costs, and procedures that differ significantly from those in other states.

At the heart of New Jersey's liquor license process is the challenge of scarcity. The state's unique system limits the number of available liquor licenses by each municipality's population, creating a competitive and often expensive marketplace for retail liquor licenses that will allow small businesses to sell alcoholic beverages. This makes getting a New Jersey retail consumption for restaurants or retail distribution liquor license for a liquor store a significant investment for any business.

In addition, the process of applying for, transferring, or purchasing a liquor license in New Jersey involves a series of legal and administrative steps that you must navigate. Though the process may sound complex, it's not impossible. With the right information and guidance, small business owners can make informed decisions with greater confidence and understanding. Early contact with an NJ ABC lawyer will help you secure a liquor license you may be interested in obtaining.

How Difficult Is It to Get a Liquor License in New Jersey?

Given the unique laws and regulations, small business owners looking to obtain a retail liquor license in New Jersey to sell alcohol to customers can feel like they are completing a complex puzzle. There is a strict limit on the number of available retail liquor licenses based on the population of each municipality in the state. New liquor licenses are rare – and acquiring a liquor license by purchasing one from a seller can become a challenge when many other businesses want a liquor license, too.

Under New Jersey law[1], there can only be one retail consumption liquor license for every 3,000 residents and one retail distribution liquor license for every 7,500 residents. In small towns, there may only be one or two licenses. The limit in small towns often leads to high demand and intense competition for liquor licenses that are being sold by current liquor licensees in New Jersey. In rare instances when new licenses are issued, the municipality will often put it up for public sale through a public bidding process, turning the acquisition of a retail liquor license into a competitive and potentially costly investment. A retail consumption license will allow you to sell all alcoholic beverages, not just beer and wine.

As a result, one of the most common ways to acquire a liquor license in New Jersey is to purchase an existing retail liquor license from someone selling and complete the liquor license transfer process by filing a person-to-person or place-to-place application with your local issuing authority to transfer the license to your business and your premises.

Contact a commercial broker

Typically, most interested potential purchasers of a New Jersey retail liquor license will reach out to a commercial broker that specializes in liquor licenses and the sale of bars and restaurants in New Jersey to search for a liquor license that may be for sale in interest communities.  For a list of brokers who may be able to help you find a liquor license for sale in certain communities in New Jersey, please contact our office.  There are several experienced commercial property brokers that we can put you in touch with to help you find a liquor license that may be for sale in the area of New Jersey where you are looking to locate your business.    

Contact the municipal clerk

To find a liquor license in New Jersey that may be for sale, you may also contact the Municipal Clerk and ask if they are aware of any inactive liquor licenses that may be for sale in the city/town where your bar, restaurant, or liquor store will be located.  The municipal clerk is usually familiar with the liquor licenses in the municipality and may be able to put you in touch with a liquor license holder who could be selling a license. The holder of a liquor license that is not currently located at a place of business (“pocket licenses”) may be interested in selling the license. 

Despite these hurdles, obtaining a New Jersey liquor license is more than just having the financial resources – it's about being prepared and knowledgeable. Familiarizing yourself with local laws, staying informed about available liquor licenses, and preparing a strong application with the help of an experienced New Jersey alcoholic beverage control lawyer are critical steps to take for success.

What Is New Jersey's New Alcoholic Beverage Control Law on Liquor Licenses?

On January 16, 2024[2], Governor Murphy of New Jersey signed a bill into law aimed at increasing the number of retail liquor licenses available for use and loosening various restrictions on liquor licensing for breweries, cideries, meaderies, and distilleries in New Jersey.

These new liquor license laws are aimed at modernizing some of New Jersey's “archaic” liquor licensing laws that create issues with scarcity. The changes under this new law for retail liquor licenses in New Jersey include:

• Liquor License holders can no longer keep inactive licenses indefinitely. After 2 years of inactivity, the holder must either use the license or sell it. If the liquor license holder fails to act on either option, the license can be transferred from one municipality to a contiguous neighboring municipality.
• If an inactive retail consumption license has not been renewed in the last 8 years, municipalities may choose to create a new retail license and put it up for public sale to be used at licensed premises
• Municipalities in New Jersey can now create a new class of retail consumption liquor licenses called mall licenses for food and beverage businesses in shopping malls and some qualifying strip malls.

A liquor license is considered inactive if it's attached to a specific location but is not in use during the licensing term. A pocket license refers to a liquor license that has been purchased but has not been attached to a specific location. New Jersey lawmakers expect these changes will increase the number of available licenses on the market by 15% across the state. There are approximately 1,356 inactive licenses.

How Do You Apply for a Retail Liquor License in NJ?

Applying for a retail liquor license in New Jersey is a structured process overseen by the NJ Division of Alcoholic Beverage Control (ABC) and the local issuing authority.  A 12-page liquor license transfer application is filed with the municipal clerk or ABC Board clerk of the local issuing authority.

It's important to understand that this application process is not just for new licenses. You must also fill out this New Jersey retail liquor license application for person-to-person transfers, place-to-place transfers, partnership changes, corporate structure changes, license renewals, and other specific circumstances.

The NJ retail liquor license application is detailed and requires careful attention to ensure compliance with all requirements. You must accurately complete the application to be submitted, ensuring that you've provided all of the requested information and paid all fees required. This includes details about your business, the type of license you're applying for, and any relevant information about the site of your location or ownership of the establishment. You must submit a $200 filing fee to the State of New Jersey and a filing fee to the local issuing authority along with the retail liquor license application.  There may also be a $75.00 filing fee to be submitted to the NJ ABC for any bulk transfer of alcohol between the seller and buyer of the liquor license.

The local liquor licensing fees vary by municipality according to the annual liquor license fee.  The local issuing authority's annual retail liquor license fee may be up to $2,500.00.  Suppose you're the liquor license purchaser or licensee. In that case, you must also pay the municipality an application filing fee equal to 10% of the annual license fee, which increases to 20% if the transaction involves both a person-to-person and a place-to-place transfer. Depending on your local issuing authority, you may have to pay additional local licensing fees.

Because the liquor license transfer process in New Jersey can be so complex with so many layers, you can increase your chances of a successful application with the help of an experienced New Jersey liquor license attorney who can navigate your paperwork and ensure that everything is covered.

Can You Buy a NJ Liquor License from Another Person?

Purchasing an existing New Jersey liquor license from another individual, corporation, LLC or business is a common route for many aspiring licensees. This process, known as person-to-person transfer is a viable option when new licenses are scarce or unavailable in your municipality. You can contract to buy a license from the existing licensee. Most licenses are held in the name of a corporation or limited liability company.

To initiate a person-to-person transfer, both the buyer and the seller are required to file a retail liquor license transfer application with their local issuing authority. This involves publishing legal notices of intent to transfer the license and providing written consent for the transfer. The process is meticulous and demands thorough documentation for regulatory compliance by the applicant.  There will also be a thorough background investigation of the applicant by the police department of individuals having an ownership interest which shall include fingerprinting to confirm the individuals have no convictions of a crime and a source of funds disclosure to confirm you are eligible to hold a license to serve alcohol.  Please be aware the police department background investigation can take several months to process. The police will confirm you are qualified to hold a license.

Moreover, the buyer must contact the NJ Division of Taxation's Licensing Unit to apply for a Certificate of Sales Tax Authority and an Alcoholic Beverage Retail License Clearance Certificate. These steps are integral to the process because they show that the transfer is legitimate and recognized by all of the relevant state and local authorities. As the buyer, you will also have to publish a notice in the newspaper. The legal notice must be published twice, 7 days apart.

Purchasing a retail liquor license in New Jersey from a seller of a license can be quicker than waiting for a new retail liquor license to become available. However, it's important to approach this process with due diligence and professional legal assistance. A qualified NJ ABC lawyer can help you navigate all of the legal intricacies that may not be apparent on the surface, increasing your chances of a smooth and compliant liquor license transfer that will be approved by the local issuing authority and ultimately set you up for success in your business endeavors.

How Much Do New Jersey Liquor Licenses Cost?

The purchase price of New Jersey liquor licenses varies depending on the type of retail license you're applying for, the municipality where you're applying, and the market demand for liquor licenses.

The most expensive cost of a retail liquor license in New Jersey is the purchase price, which can fluctuate based on the scarcity and competition within a municipality. How many total retail liquor licenses does the municipality have and how many are available? Are you competing with any other interested buyers in the market who are looking to make a similar investment in the town or city?

Who Controls Liquor Licenses in New Jersey? Division of Alcoholic Beverage Control and local issuing authorities.

The New Jersey Division of Alcoholic Beverage Control (ABC), as part of the Department of Law & Public Safety of the Office of the Attorney General, oversees the overall administration of liquor licensing in the state. This includes setting statewide policies, enforcing the law and regulations, and handling the statewide liquor license process.

At the local level, municipal authorities in New Jersey have significant control over the issuance, renewal, and enforcement of retail liquor licenses within their jurisdictions. This includes the local issuing authority such as the Township Council or Committee or other governing body of the municipality where the license may be located.  Typically, the Municipal Clerk or the ABC Board Secretary is responsible for processing liquor license transfer applications and renewals before the local issuing authority approves by resolution.  The Municipal Clerk will also collect the local renewal fee. Local authorities also have the discretion to set additional requirements, determine the renewal fee, and request existing license holders obtain local ABC cards by enacting municipal ordinances regulating alcohol sales. The local police department and ABC investigators will investigate any possible violations of NJ ABC law.

Call an experienced New Jersey liquor license attorney.

Obtaining a liquor license in New Jersey for your business can lead to rewarding opportunities for growth and success. Given the complexity and variability of the law and regulations involved, consulting with an experienced liquor license attorney can make a significant difference in your liquor license application process. A lawyer's expertise can help streamline the process, mitigate your risks of violating the law, and position your business for a successful venture in New Jersey's vibrant and competitive alcoholic beverage market.

At Villani & DeLuca, P.C. our experienced attorneys can help with all aspects of purchasing a New Jersey liquor license. Whether you're interested in buying a retail liquor license, you're about to purchase a restaurant or bar with a liquor license, or you have questions about your current liquor license and New Jersey law, contact us now to discuss your options[4]. We represent and support clients throughout the State of New Jersey to assist them in obtaining liquor licenses.