Texas TABC permits for restaurants: mixed beverage, beer and wine

A Texas restaurant or bar that serves alcohol on the premises needs a permit from the Texas Alcoholic Beverage Commission, and the choice is mostly between the mixed beverage permit, which covers spirits, wine and beer, and the wine and malt beverage retailer's permit, which does not cover spirits. A food and beverage certificate is required for certain permit holders. Applications go through the commission's online system.

What does the mixed beverage permit allow?

The TABC's list of license and permit types describes the Mixed Beverage Permit, known as the MB, as allowing sales of distilled spirits, wine and malt beverages for on-premises consumption. It also covers transporting alcohol to the licensed premises, guestroom minibars at hotels and events at temporary locations, which require an approval process. A bar or a full-service restaurant that wants cocktails applies for this permit.

What does the beer and wine permit allow?

The Wine and Malt Beverage Retailer's Permit, the BG, allows sales of wine and malt beverages, but not distilled spirits, for both on-premises and off-premises consumption. Temporary events also require an approval process. A cafe or casual restaurant that wants beer and wine only would normally look at this one, and it can be a simpler start than a full spirits permit.

What is a food and beverage certificate?

The food and beverage certificate, the FB, is required for certain MB, BG, BE and private club holders. A business qualifies if it is defined as a restaurant under the law or keeps alcohol sales to 60 percent or less of its total sales, along with other requirements found in Senate Bill 911 of the 87th Legislature and TABC Rule 33.5. Use the commission's 60 percent figure and read the rule for the full tests.

What about private clubs?

A private club registration permit, the N, allows storing and serving spirits, wine and malt beverages for members' on-premises consumption, even in dry areas. The NB is the same but limited to malt beverages and wine, and the NE lets fraternal and veterans organizations serve members and guests. A restaurant that runs a membership club for its regulars should ask the commission whether the private club route fits, before it builds a membership around it.

How do you apply and what does it cost?

Applications and updates are handled through the commission's Alcohol Industry Management System, called AIMS. The commission publishes a fee chart and a page for new licenses and permits, and certain businesses must post a conduct, surety or fee interest bond before they are licensed. Your local TABC office can walk you through the process. Fees, local approvals and processing times vary, so ask for the current numbers before you sign a lease.

What local rules apply?

Local option rules and city or county rules sit on top of the permit. Texas has areas where alcohol sales are limited, and cities set zoning and distance rules. Before you commit to a location, check the local rules with the city and ask the commission whether your address is in an area where the permit can be used.

A worked example of the sales split

Suppose your restaurant sells $90,000 a month, of which $45,000 is food, $5,000 is soft drinks and $40,000 is alcohol. Alcohol is 44 percent of sales, under the 60 percent figure. A summer of private parties with an open bar could push alcohol sales toward the line, so track the percentage every month in your sales reports. Keep the report with your permit records.

What should you do before you apply?

1. Decide whether you want spirits, or beer and wine only.
2. Model your sales mix against the 60 percent figure.
3. Check zoning and local alcohol rules for the address.
4. Plan for bonds and fees, and ask the commission for the current chart.
5. Train the team in seller-server practice, with the seller-server training guide.

How should you plan the timeline?

Work backward from your opening date. Alcohol permits take time, and the permit cannot be used until it is issued, so do not print a cocktail menu or hire a bar team on the assumption that it will arrive on a certain day. A common plan is to open with food and nonalcoholic drinks and add alcohol when the permit is approved, and to tell your landlord, lender and staff that the opening date for the bar is separate. Keep a folder with every submission and every email from the commission, because it shows what was filed when.

What changes if you add a patio?

An outdoor area where you serve alcohol must be part of the licensed premises. If you add a patio after the permit is issued, ask the commission how to amend the premises description before the first drink is served there, and check the city's rules for outdoor seating at the same time. Serving alcohol outside the licensed area is a violation, and a busy Saturday on a new patio is the usual way it happens.

More guides for your business:

• Texas tip pooling and service charges for restaurants
• Texas statewide mobile food permit for food trucks
• Texas sales tax permit and filing for new restaurants

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