The California Department of Alcoholic Beverage Control is funded from fees paid by licensees. License fees generally fall into two categories, application fees and annual fees. The Department is authorized to increase alcohol license fees annually by an amount not to exceed inflation to ensure revenues keep pace with increased costs.
Application Fees Overview
Application fees are charged at the time an application is submitted for new licenses, or to transfer or change an existing license. These fees are charged to recover the average cost of processing the application, including the investigation of the proposed licensed premises and the background of the license applicant. Application fees are generally non-refundable.
Application fees are charged for licensing activities related to issuing a new license, transferring an existing license, or making a change to an existing license – such as moving the location of the licensed premises, qualifying a new manager, or changing the ownership structure. The fees for new licenses or the transfer of an existing license can vary based on the privileges provided by the license. Specifically, the fees for license types that authorize the retail sale of all types of alcoholic beverages (namely, beer, wine, and distilled spirits), which are called “General” licenses, have higher fees. The number of General licenses is limited based on the population of each county and the process for applying for new a new license for most General licenses type occurs only once per year through a public lottery referred to as the “Priority” process.
To process most applications, the Department must conduct an investigation regarding the proposed licensee and premises. In some cases, an applicant may require multiple licenses to conduct the proposed business. If an application includes multiple license types for the same premises and all license types are identified at the time of application, only one application fee (the highest one) will be charged.
Annual Fees Overview
Annual fees are charged each year and must be paid to keep a license active for the following year. The annual fee for the first year of operation of a new license is due at the time of application and will allow the license to be active for one year from the date of issuance. The annual fee that is collected at the time of application is refundable if the application is withdrawn or denied.
For some license types, the annual fees charged will vary based on production, population, or the number of months of the year the licensee operates. These tiers are briefly described below:
- Production-based fees: For License Type 02 Winegrowers and Type 22 Wine Blender, the Annual Fee is based on the number of gallons produced. Production is reported annually and there is a process to compute an additional payment or refund, if the licensee’s production moves them in to a tier that is different from the previous year.
- Population-based fees: For On-Sale General licenses, the Annual Fee is based on the population of the city in which the licensed premises is located. There are three tiers, cities with populations over 40,000, cities with population between 20,000 and 40,000, and then all other jurisdictions.
- Seasonal Fees: For seasonal licenses, Annual Fees vary based on the number of months the licensee has indicated they will operate. These fees generally vary based on three-month increments. The ABC no longer issues new seasonal licenses.
The annual fee is the sum of the License Fee and at least one of the following surcharges, depending on the license type
Penalties for Late Payment of Annual Fees
License renewal notices are sent annually to all licensees to communicate the annual fees that are due by the expiration date of the license. If full payment is not received or postmarked by the expiration date, the following penalties are imposed:
- If payment is received within 60 days after the license expiration date, a penalty of 50 percent of the License Fee is added to the annual fee.
- If payment is made between 60 and 90 days after the license expiration date, a penalty of 100 percent of the License Fee is added to the Annual Fee.
- If payment is not made within 90 days after the license expiration date, the license is automatically revoked.