As a law firm for the hospitality industry, Jeffcott Law commonly assists clients with liquor permit transfers. It may not sound very difficult, but the act of transferring a liquor permit can be extremely time-consuming if you are not working with an experienced Liquor Attorney. The information provided in this blog post gives an overview of the liquor permit transfer process so that business owners and individuals can be prepared and informed as they begin this process.
The first step is to prepare the initial documents required in order for the Division of Liquor Control (“Division”) to accept your application. For this scenario, we will assume that a business is purchasing a liquor permit and they have a registered LLC that will be recognized as the liquor permit holder. In this case, there are three documents that must initially be filed with the Division, they include: a Transfer Application signed by the Buyer and Seller, an LLC Disclosure Form that lists the individual members of the Buyer’s LLC, and a Personal History Background Form for all individuals in the Buyer’s LLC with a membership or voting interest of 5% or more. At the time of filing, you will also need to pay a $100 processing fee to the Division in order for your application to be accepted.
Once these initial documents are filed, the Division will key this information into its system and assign the Buyer a liquor permit number. It can take a few days for this to happen, but once everything is processed into the system, the Division begins to notify a number of other government agencies that affect the permit transfer.
The Division sends different notifications to City Council, the County Board of Elections, and the Ohio Department of Taxation. City Council is notified that the Liquor Permit Applicant is applying for a liquor permit at their proposed location. City Council is given 30 days from the receipt of the notification to decide if they want to object to the liquor permit transfer. Most cities do not object, but if they do, the Division will schedule a hearing to determine whether the city’s objection is warranted or not. At that point, it is very important to work with a skilled liquor attorney to represent your business at this city objection hearing. Jeffcott Law has an excellent track record when it comes to winning objection hearings. It is important to note that institutions, such as schools and churches, within 500 feet of the proposed location also have the opportunity to object to the liquor permit transfer.
The Board of Elections is also notified after a Transfer Application is filed so that they can determine if the proposed location is “wet” for alcohol sales. If your proposed location is in a dry area, meaning that alcohol sales are not permitted, then you will have to draft and pass a local option ballot initiative before the liquor permit transfers to your location. At Jeffcott Law, we perform due diligence research from the outset to make sure your proposed location is wet for alcohol sales and to avoid any surprises.
The Ohio Department of Taxation (“Tax Department”) also plays an important role in the transfer of a liquor permit. When a Transfer Application is filed, the Division asks the Tax Department to check to make sure that the Seller of the liquor permit is current with all sales and withholding taxes. If the Seller has any tax delinquencies, then the Tax Department will issue a “Do Not Proceed Letter” that prevents the liquor permit from transferring to the Buyer. Until all tax issues are resolved, the permit will not transfer. Tax problems can drastically delay a liquor permit transfer. An experienced Liquor Attorney knows how to efficiently handle these kinds of issues. Jeffcott Law makes sure our clients know exactly what kind of tax history a Seller has before they enters into a contract to purchase an Ohio liquor permit. By researching this tax information ahead of time, we can avoid these delays. Once all taxes are filed and paid, the Tax Department will give the Division the green light to transfer the liquor permit.
But we aren’t quite in the clear yet. The Division requires a number of other steps that can be completed while your application is pending before they approve the transfer. First, all individuals who are members of the liquor permit applicant company must get their fingerprints taken for a background check. It is important to do this as soon as the transfer application is filed because it can take a few weeks for the results to be sent to the Division. Additional documentation required by the Division includes: an executed Lease or Summary of Tenancy Rights (if you do not own the real estate), Financial Verification of the funds used to start the business and purchase the liquor permit, and the executed Purchase Agreement for the liquor permit or a Summary of the Purchase Agreement .
Finally, after all of the above obstacles are taken care of, you will be ready to schedule your final inspection. A Compliance Officer will perform an on-site inspection to make sure that the premises is ready to open and operate. The main item the Compliance Officer will want to see is that all construction is complete. However, it’s important to consult with a Liquor Attorney to make sure you will not have any additional problems with the other requirements. We oftentimes will visit a client’s location to do a walkthrough ourselves, before the Compliance Officer’s inspection, to make sure everything is ready to go.
While this overview covers all of the basics, transferring an Ohio liquor permit can be more complicated than you expect. By working with an experienced Liquor Attorney, you ensure that this process will be handled in an efficient manner. If you choose to work with Jeffcott Law, we will make sure that you are comfortable and informed every step of the way.
If you have any additional questions about this overview, please feel free to contact Jeffcott Law by calling 330-417-8678.
