OBTAINING A RETAIL LIQUOR LICENSE IN THE STATE OF ILLINOIS

 

Because Illinois is a dual licensing state, obtaining a retail liquor license is a multi-step process. The first step to success is obtaining a local liquor license, if you do not obtain the local license, the state license is impossible to get. In order to get the local liquor license, you may need to go in front of a liquor commission or a governing board such as a city council. Once you obtain local approval, then you can apply for a state license. This article will break down the local and state license issues for obtaining a liquor license.

LOCAL ISSUES

The State of Illinois allows local jurisdictions to control the number, kind, and classifications of liquor licenses. 235 ILCS 5/4-1. A local ordinance or possibly a government resolution will contain the rules for properly filing a local liquor application.

Being a dual licensing state sometimes makes it difficult for an applicant to navigate the waters. There are thousands of local jurisdictions in Illinois with a myriad of rules. It is impossible for an applicant to know all the rules, as there are no uniform local standards across the state.

However, by understanding the enumerated powers the state provides the local governments, an applicant can gain a clear understanding of issues it may face at the local level. These state specific laws will give an applicant a road map for traversing the government bureaucracy.

Understanding the following specific laws will help the applicant through the process.

Under 235 ILCS 5/4-7 the State provides local jurisdictions with the right to fingerprint any applicant. This means the state delegates background checks to the local licensing authorities. When you apply for a local license you can expect a criminal background check and fingerprinting. Which also means an additional fee will occur.

The biggest result of the background check is that the license may face substantial delay. In some jurisdictions this could take months. So depending on the jurisdiction, prepare yourself for a lengthy delay.

Under 235 ILCS 5/4-5 the State allows a local jurisdiction to examine an applicant under oath and conduct a public hearing on a license. Whether the local jurisdiction exercises these powers will determine how long an applicant may need to wait for license approval. If the hearings only occur once a month or at another infrequent time, an applicant may wait months for a hearing. After the hearing concludes, the application may need another level of approval through the mayor or local liquor commissioner.

Under 235 ILCS 5/4-2, the mayor generally is the local liquor commissioner and needs to sign off on any application. Before applying for a local license, an applicant should know the local process in order to minimize the chances for delay.

Under 235 ILCS 5/4-1 the State allows the locals to determine the amount of licenses per jurisdiction. If the jurisdiction is at the maximum amount allowed, then the applicant will either need to wait in line or get an ordinance change.

Some other issues of note, large municipalities like Chicago and Naperville have their own independent liquor commissions. In Chicago the process is very involved and community input and facilities inspections are necessary. In Naperville, the commission reviews the applications and sends recommendations to the Mayor for approval.

And a further note, the State under 235 ILCS 5/4-1 allows the locals to determine the license fee. So in addition to a state fee, there is also a local licensing fee which differs by jurisdiction.

 

STATE PROCESS

Once an applicant obtains the local liquor license, it can apply for the state liquor license. Unlike the local process which faces a myriad of rules and different waiting periods, the state process is straightforward.

Here are the items needed to obtain a state liquor license: 1. A completed and signed Retailer’s Liquor License Application; 2. Proof of Insurance; 3. A photocopy of the local liquor license; 4. If applicable, a prior state liquor license; 5. A completed Bulk Sales Release Order Form from the Department of Revenue (Form CBS-1), if there is a sale, purchase, or transfer of business assets; 6. Proof of purchase of the business, a bill of sale. Also, you must provide proof that the business has rights to the retail premises through a lease or mortgage; 7. A Business FEIN; 8. Illinois sales tax account; and 9. A check for $750.

Unlike the locals, the waiting period is shorter. Normally, expect a waiting period of 2-3 days.

Even if you can meet all the filing requirements, there is one more additional step that you should consider. State law under 235 ILCS 5/6-2 prohibits certain individuals from holding a liquor license. As a precaution, you should make sure that the applicant does not fall into one of these categories. Further, state or local government codes may contain specific and targeted restrictions for a license holder, such as they can’t obtain a license under specific and enumerated circumstances.

 

CONCLUSION

Obtaining a liquor license is sometimes an arduous process. Nevertheless, an applicant can cut down on the frustration or burdens by knowing the local process. By planning accordingly, obtaining a license can be a streamlined instead of a difficult process.

If you have further questions or need someone to guide you through this complicated process, Irish Liquor Lawyer is here to help! Feel free to contact sean.oleary@olearylpgroup.com or visit irishliquorlawyer.com.

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