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California's Alcoholic Beverage Laws: What to Know

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February 1, 2023
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UPDATED: 
April 10, 2023
California's Alcoholic Beverage Laws: What to Know

If you are planning to start a business selling alcohol in California, then there are certain laws you need to know. It can be a bar, a pub, a café, a restaurant, or an alcohol delivery service. The laws may differ for wholesalers, suppliers, distributors, or consumers. 

California is one of the most popular states in the alcoholic beverage industry. It is also a very lucrative market for alcohol-selling business owners. The alcohol consumption trends in California from 2015 to 2020 have been increasing. Spirit consumption had the highest rate, with 3.12% CAGR, led by straight whiskey, followed by Canadian and scotch whiskey. 

Knowing about the laws governing alcohol distribution will enable you to distribute your alcoholic products and expand your brand legally. Therefore, let us dig into it.

1. You have to get RBS Certification to serve alcohol

The foremost thing to know is that you can only begin to serve alcohol anywhere in California with a valid certification. The California Assembly Bill 1221, mandated on July 1, 2022, requires alcoholic beverage servers, managers, and bartenders to complete an ABC-approved RBS training and pass the exam. Failure to do so can result in heavy fines. 

It is important for anyone serving alcohol to consumers to comply with the Alcohol Beverage Control policy. The certification program helps implement the policy. It teaches servers how to handle difficult situations. These can include over-serving alcohol to patrons and the dangers of selling it to minors. 

However, the good news is that you can get your RBS certification in California by enrolling in an online training program approved by the ABC of California.

Only after successful certification approval will you be able to serve alcohol at your establishment. 

2. You need to obtain an ABC Liquor License

Apart from the certification training, you must also get an ABC liquor license to sell and distribute alcohol in California. For that, you first need to fulfill some conditions:

  • You must be at least 21 years old
  • Your establishment must have the right insurance
  • You must have zoning permits for liquor sales
  • You must possess a business license and a seller's permit

The types of California liquor licenses vary with the laws and requirements of the location. You can learn more about it by visiting the nearest California Department of Alcoholic Beverage Control office. The process can take around 90 days. However, transfers only take about 75 days. The process is the same regardless of your business location. However, the local zoning and regulations may differ for the kind of licensure you require. 

3. Get an Alcohol Seller's Permit

You would need to apply for an alcohol seller's permit to be eligible to obtain a liquor license in California. It is required for alcoholic beverage tax and sales tax purposes. It is vital because, without it, selling alcohol could lead to incarceration, heavy fines, or both. 

Applying for an alcohol seller's permit is a simple process. The California Department of Tax and Fee Administration has an online portal through which you can apply for one. 

Moreover, the California State Board of Equalization monitors the alcoholic beverage tax program, per-gallon on sale, distribution, and importation of alcoholic beverages. Therefore, you must register with the BOE if you plan to sell alcohol as a wholesaler to shops, restaurants, bars, pubs, stores, and cafés. 

You will also need a federal permit and a stamp tax regulated by the Alcohol and Tobacco Tax and Trade Bureau before selling liquor in California. It authenticates your liquor business at the federal level, is a simple online process, and does not require any fee. 

4. Get a Liquor Liability Insurance

If you plan to distribute, manufacture or sell alcohol at an establishment or an event, you must obtain California Liquor Liability Insurance. It protects against loss or damage if an intoxicated patron injures themselves or others. 

The Dram Shop State-level laws hold alcoholic beverage servers financially responsible for any harm caused by the intoxicated individual to the establishment, themselves, or others. Having an insurance liability helps you cover it.

Alternatively, if you contributed towards another person's intoxication leading to property damage or damage to themselves or others, the liquor legal liability provides the financial coverage.

Getting Host Liquor Liability Insurance policies would benefit you as a business owner who sells alcoholic beverages. It covers insurance for special business events where you serve alcohol to prospects, customers, or even your employees. 

5. Know how much the Licenses and Permits cost

Lastly, it is better to spend on acquiring all the necessary licensures and permits than paying fines. The cost of applying for licenses and permits is much lower than the fines you would otherwise have to pay. You may even get into additional legal trouble if you lack the required documents. 

Moreover, take the time required for each permit, and license into account and plan accordingly. Otherwise, you may end up losing business. Some of the common costs that you may incur as an alcoholic beverages seller, distributor, or manufacturer in California include:

  • The average fee of most non-general applications for applying for new licenses is $905
  • The cost of an existing license transference from one person to another range between $100 to $1,370
  • Temporary licenses cost an average of $100
  • Catering and event permits cost between $100 to $1,000, depending on the number of attendants

Moreover, there are miscellaneous fees like operating and other expenses. You can review a complete application fee schedule on the CDABC website

Conclusion

Before planning to sell, manufacture or distribute alcohol in California, you need to know the required laws, permits, licenses, and certifications. 

Obtaining the liquor license requires about three months. Therefore, you must apply in time. Another thing that you need is the RBS certification. Remember that you may need to retake the exam to comply with the 2022 standards set by the ABC, even if you have taken it before. Therefore, you must complete this step.

You must also obtain a business license, an alcohol seller's permit, and liquor liability insurance. Getting all the documents in order will save you from legal troubles and heavy fines.

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