Tennessee liquor-by-the-drink license and beer permits

In Tennessee, a restaurant serves spirits and wine under a liquor-by-the-drink license from the Tennessee Alcoholic Beverage Commission, and serves beer under a separate permit from the local beer board. The Commission says its liquor-by-the-drink licenses do not authorize beer sales, so a restaurant that wants the full range usually holds both. Local approval and distance rules apply, and a large city such as Nashville may have its own beer board and rules.

What does the liquor-by-the-drink license allow?

The Commission says liquor-by-the-drink licenses, called LBD licenses, may be issued to restaurants, hotels, private clubs and other establishments eligible under Tennessee law. The license allows sales of spirits, wine, high gravity beer and spirits- or wine-based ready-to-drink cocktails. Restaurants can also apply for a wine-only license. A restaurant planning cocktails needs the full restaurant license, and one that wants only wine can consider the wine-only license.

What types of license are there?

The Commission lists these license types: restaurant, caterer, special occasion, club, hotel-motel, limited service restaurant, wine only restaurant, festival, and airline, boat and train. A limited service restaurant license is for a business that meets a lower food-service standard, so read the Commission's applicant guide to see which type fits your kitchen and hours. Choosing the wrong type is the usual cause of a rejected application.

How do you apply?

The Commission publishes an applicant guide for liquor-by-the-drink applicants, dated January 13, 2025, and a guide to navigating the licensing process, and its support team answers questions at 615-741-1602 or by email. Its pages do not describe the steps, fees or timelines, so start with the applicant guide and the fee page, and expect a local government step as well, since a city or county typically has a role in approving the license.

What about beer?

The Commission says its LBD licenses do not authorize beer sales, and that establishments wanting to sell beer should contact their local beer board. Which body regulates which beer can depend on the strength of the beer, so ask your local beer board and the Commission which rules apply to your address and to the beers on your menu.

What is different in Nashville?

Local rules can add to the state's. In a large city such as Nashville, expect a local beer board with its own rules and regulations, and expect minimum distance requirements from places such as schools and churches to be part of the picture. Sources describe the order of the state and local applications differently, so ask the Commission and the local beer board which comes first for your address, and get the answer in writing.

A worked example of a pre-opening plan

An owner opening a restaurant in a Tennessee city checks zoning and distance rules for the address in month one. In month two, the owner reads the applicant guide, picks the license type, gathers the lease, floor plan and ownership documents and calls the Commission's support line. In month three, the owner files the application and meets the local beer board for the beer permit. In month four, staff complete any server training the Commission requires and the owner confirms the insurance. Opening day for the bar waits for the license in hand, and the owner opens with food if it is late.

What about server training?

Training vendors describe a server permit for people who serve alcohol on premises, but their descriptions of the deadline and how long the permit lasts conflict, and I have not confirmed the rule. Ask the Commission for the current requirement for your staff, and keep a record of each employee's permit or certificate.

What should you do before you sign a lease?

1. Check zoning and distance rules for the address.
2. Ask the Commission which license type fits your restaurant.
3. Ask the local beer board about the beer permit.
4. Put a license condition in the lease.
5. Budget for fees, insurance and training.

What should you keep after you are licensed?

Keep the license posted where required, a copy of the application and every letter from the Commission and the local beer board. Calendar the renewal dates, and ask what notice you must give before changing ownership, the floor plan or the hours. A license can be at risk if you change something without telling the regulator, so put any plan for a patio, a second bar or a change of owners on your list of questions for the Commission before you act. Train managers on what the license allows and what it does not.

What if the application is delayed?

Build slack into your opening plan. Tell your landlord, lender and staff that the bar opens when the license arrives, and keep the menu printed in two versions, one with cocktails and one without. Respond to every request from the Commission or the beer board quickly and in writing, and keep a log of each contact. A complete, well-organized file moves faster than one that needs repeated corrections.

More guides for your business:

• Tennessee health inspection scores for restaurants
• Nashville food truck permits for mobile food businesses
• Tennessee tip pooling and service charge law for restaurants

More in the US guides for food businesses.