Texas alcohol licensing changed significantly in September 2021 when the state eliminated the legal distinction between “beer” and “ale.” Everything now falls under “malt beverages,” simplifying some categories while leaving the overall system as complex as ever. The right permit depends on three questions: What will you sell? Where will customers consume it? Are you producing or just selling?
The total cost of any license includes state fees, county fees (typically 50% of the state fee), city fees (another 50% of the state fee), and surety bonds. A license listed at $1,000 in state fees actually costs closer to $2,000 or more once local fees and bonds are added.
For Restaurant and Bar Owners
What permits do I need to legally serve alcohol with food?
You’re building a business where alcohol complements the dining or social experience. Your primary concern is having the flexibility to serve what customers want while staying compliant. The permit you choose determines whether you can offer cocktails or just beer, whether you can stay open late, and how the presence of minors affects your operations.
The Mixed Beverage Permit (MB)
This is the full-service license. An MB permit allows you to sell all types of alcohol, including distilled spirits, wine, and malt beverages, for on-premise consumption. Customers can order cocktails, shots, beer, and wine by the glass.
Cost breakdown:
- Initial state fee: approximately $5,300
- Renewal (every 2 years): approximately $2,650 (drops after the first renewal)
- Add county and city fees plus bonds, and initial total typically reaches $8,000 to $12,000
The MB permit is required for any establishment serving liquor. If you want whiskey on your back bar or the ability to make margaritas, this is the permit category. There’s no “lite” version for serving just a few spirits.
What it doesn’t include: The MB permit alone doesn’t allow you to stay open past midnight or let minors into your establishment under normal circumstances. Those require additional permits or certificates.
Food and Beverage Certificate (FB)
This certificate works alongside other permits rather than replacing them. It certifies that your establishment is “food dominant,” meaning more than 50% of your gross revenue comes from food sales rather than alcohol.
Why it matters:
- Allows minors to be on premises when accompanied by a parent or guardian
- May qualify your establishment for lower mixed beverage tax rates in some circumstances
- Required for operating in certain restricted areas where alcohol-dominant businesses are prohibited
Obtaining an FB certificate requires demonstrating your food sales consistently exceed alcohol sales. The TABC monitors these ratios, and falling below the threshold can jeopardize the certificate.
Late Hours Permit (LH)
Standard alcohol service must end at midnight on weeknights and 1 AM on weekends. A Late Hours permit extends that to 2 AM.
Cost: Approximately $1,100 (state fee) plus local fees
Not every location qualifies. Late Hours permits are subject to local government approval, and some municipalities have restricted or eliminated them in certain areas. Before assuming you can operate until 2 AM, verify availability for your specific location.
When BG Makes More Sense Than MB
The Wine and Malt Beverage Retailer’s Permit (BG) costs roughly $1,900 compared to $5,300+ for an MB permit. If your concept doesn’t require liquor, the savings are substantial.
A BG permit allows you to sell wine and malt beverages (beer) for on-premise consumption. Customers can order glasses of wine, bottles at the table, draft beers, and bottled beers. What they cannot order: anything with distilled spirits.
Best fit for: Wine bars, beer-focused gastropubs, pizza restaurants that want beer and wine but not a full bar, casual dining concepts where the cocktail program isn’t central to the experience.
The limitation: If you open with a BG permit and later decide you need a full bar, you’ll need to apply for an MB permit separately. The BG doesn’t upgrade; it’s a different license category entirely.
Sources:
- Mixed Beverage Permit fees and requirements: TABC Fee Schedule (tabc.texas.gov)
- Food and Beverage Certificate requirements: TABC Certification Guidelines
- Late Hours Permit availability: TABC and local jurisdiction regulations
For Liquor Stores and Retail Sellers
Which permit lets me sell packaged alcohol for customers to take home?
Your business model centers on package sales, whether that’s a dedicated liquor store, a convenience store adding beer, or a grocery chain expanding its alcohol selection. The permit you need depends on what products you want to carry. Texas maintains strict separation between who can sell liquor versus beer and wine.
Package Store Permit (P)
This is the liquor store license. A Package Store permit allows you to sell distilled spirits in original, sealed containers for off-premise consumption. Customers buy bottles to take home; they cannot open or consume anything on your premises.
Cost: Approximately $1,000 (state fee) plus local fees and bonds. Total initial investment typically runs $2,000 to $3,500.
Critical restrictions:
- Package stores cannot sell single servings for on-premise consumption
- Texas law historically prohibited package stores from selling beer and wine (this may vary; verify current regulations)
- Location restrictions are strict: cannot be within 300 feet of a church or hospital, 300-1,000 feet from schools
- Sunday sales restrictions apply
Package stores also face ownership limitations. Chains are restricted in how many locations a single owner can operate. This prevents large national retailers from dominating the Texas liquor market.
Wine and Malt Beverage Retailer’s Off-Premise Permit (BG for off-premise)
For selling beer and wine in sealed containers to take home, most retailers use some version of the BG permit category. Grocery stores, convenience stores, and specialty wine shops typically operate under these permits.
Cost: Approximately $1,900 for wine and malt beverages combined.
This permit allows selling beer and wine in original containers. Customers cannot open or consume products on premises. The advantage over a Package Store permit: BG permits don’t carry the same ownership restrictions, allowing chains and large retailers to operate multiple locations.
Retail Dealer Licenses: BE and BF
These licenses serve more limited purposes than full retail permits.
BE (Retail Dealer’s On-Premise): Allows selling malt beverages only for on-premise consumption. Think of a bar that serves beer but nothing else. Cost: approximately $1,100.
BF (Retail Dealer’s Off-Premise): Allows selling malt beverages only for off-premise consumption. A convenience store that wants to sell only beer (no wine) might use this category. Cost: approximately $500 to $600.
These narrower licenses cost less but limit your product offerings significantly. Most retailers opt for broader permits to maintain flexibility.
Choosing Your Permit Category
If you want to sell liquor (whiskey, vodka, tequila, etc.): Package Store Permit (P) is your only option for retail sales. You cannot sell distilled spirits under any beer/wine permit.
If you want to sell beer and wine but not liquor: BG permit covers both categories in one license and is the standard choice for grocery stores and wine shops.
If you want to sell only beer: BF or BE permits cost less but limit you to malt beverages only. Consider whether the savings justify losing the ability to sell wine.
A common mistake: Opening with a limited permit to save money, then realizing customers expect products you can’t legally sell. The cost difference between a BF permit ($500-600) and a BG permit ($1,900) is meaningful, but losing wine sales because you chose the cheaper option may cost more in the long run.
Sources:
- Package Store Permit requirements and restrictions: TABC Permit Categories
- Retail Dealer license fees: TABC Fee Schedule
- Ownership limitations on package stores: Texas Alcoholic Beverage Code
For Breweries, Wineries, and Distilleries
How do I legally produce alcohol and sell directly to customers?
You’re making the product, not just selling someone else’s. Production licensing in Texas involves navigating the three-tier system (manufacturer, distributor, retailer) while understanding which exceptions might let you bypass traditional distribution for at least some of your sales.
Brewery License (BW)
A Brewer’s License allows you to manufacture malt beverages. What makes Texas interesting for breweries is the self-distribution provision: breweries producing up to 40,000 barrels annually can sell directly to retailers and consumers without going through a distributor.
Cost: Approximately $1,500 to $3,000 depending on production capacity tier.
Taproom rights: Breweries can operate taprooms where visitors sample and purchase beer on-site. This direct-to-consumer sales channel often provides better margins than wholesale distribution.
The 40,000 barrel threshold: Once production exceeds this limit, self-distribution rights end and all sales must go through licensed distributors. Planning for growth means understanding when this transition will affect your business model.
Brewpub alternative: A brewpub license combines brewing with restaurant operations. The trade-offs differ from a straight brewery license, particularly regarding distribution rights. If your concept is primarily a restaurant that happens to brew beer, the brewpub structure may fit better.
Winery Permit (G)
A Winery Permit allows you to manufacture, bottle, and sell wine. Texas wineries enjoy relatively flexible rules for direct sales compared to other alcohol categories.
Cost: Approximately $500 to $1,250 depending on production volume.
Tasting room sales: Wineries can sell directly to consumers at their licensed premises. Visitors can purchase bottles to take home or consume glasses on-site at most operations.
Direct shipping: Texas allows wineries to ship directly to consumers under certain conditions, opening sales channels beyond physical tasting room visits. Regulations around shipping have evolved; verify current rules before building a shipping-dependent business model.
Off-site sales: Wineries can sell at farmers markets and certain events under supplemental permits, extending reach beyond the winery location.
Distillery License (D)
Distilleries face the most restrictive sales environment among Texas producers. While breweries have self-distribution and wineries have flexible direct sales, distilleries operate under tighter limitations.
Cost: Approximately $1,500 to $2,500.
On-site sales restrictions: Texas law limits how much a distillery can sell directly to visitors. Rules have historically included caps like two bottles per person per month. These restrictions significantly impact the taproom model that works well for breweries.
Distribution dependence: Most distillery sales must move through the three-tier system. Finding distributor partnerships becomes essential rather than optional for reaching meaningful sales volume.
Tasting rooms: Distilleries can offer tastings, but converting visitor interest into sales is constrained by purchase limits. The experience functions more as marketing for distributed products than as a primary revenue channel.
Planning for Production Growth
Production licensing tiers matter because costs and privileges change with volume.
Start small, plan for scale. Many producers begin at lower capacity tiers with reduced licensing costs. Building in the flexibility to upgrade as production grows avoids getting locked into structures that don’t fit an expanding operation.
Three-tier system realities. Texas, like most states, separates manufacturing, distribution, and retail into distinct tiers. Exceptions exist (brewery self-distribution, winery direct sales), but understanding the baseline system helps you recognize where your business model fits and where it pushes against structural limitations.
Consult before building. Production facilities represent significant capital investment. Before committing to equipment and construction, work with an attorney and accountant familiar with Texas alcohol production to structure your licensing, entity formation, and operational plans appropriately.
Sources:
- Brewery self-distribution thresholds: Texas Alcoholic Beverage Code
- Winery permit fees and direct shipping rules: TABC Winery Permit Guidelines
- Distillery sales restrictions: TABC Distilled Spirits Regulations
Quick Reference: Temporary and Special Permits
Not every alcohol sale requires a permanent license. Texas offers temporary permits for events, fundraisers, and other limited-duration activities.
Temporary Event Permit: Approximately $50 per day. Allows alcohol sales at festivals, charity events, and similar gatherings. Requires advance application; same-day permits aren’t available.
Nonprofit provisions: Organizations hosting fundraising events with alcohol sales may qualify for specific permit categories with reduced requirements.
Private club permits (N/NB): In “dry” areas where standard alcohol sales are prohibited, private club structures can sometimes operate. Members pay dues; alcohol service comes as a club privilege rather than a direct sale. Costs run $3,000 or more, and the structure involves ongoing compliance requirements.
When you need one: Any event where alcohol is sold, even for charity, requires appropriate permitting. “It’s for a good cause” doesn’t create an exemption. Nonprofits hosting wine auctions, school foundations running beer gardens, churches selling raffle tickets that include alcohol prizes—all need proper permits.
Making the Right Choice
Selecting a permit isn’t just about what’s cheapest or easiest to obtain. The permit category defines what you can sell, where customers can consume it, when you can operate, and how your business relates to the broader distribution system.
Start with your business model, not the permit list. Define what you want to sell and how you want to sell it, then find the permit that enables that model. Choosing a permit because it’s inexpensive and then discovering it doesn’t allow a key part of your concept means starting over with a new application.
Build in flexibility where possible. The cost difference between a limited permit and a broader one is often small compared to the hassle of adding permits later or changing license categories.
Get professional input. An attorney familiar with Texas alcohol law can identify issues before they become problems and may know about permit structures or exemptions that aren’t obvious from reading the TABC website.
Important Notice: This guide provides general information about TABC permit categories. Fees, requirements, and regulations change. Before making business decisions, verify current requirements with the TABC and consult with a licensed attorney familiar with Texas alcohol law.
Sources:
- Permit fee schedules and categories: Texas Alcoholic Beverage Commission (tabc.texas.gov)
- Three-tier system structure: Texas Alcoholic Beverage Code
- September 2021 terminology changes: TABC regulatory updates
- Local option and wet/dry status: TABC Local Option Elections