Every state divides liquor licenses the same way at the top level, even though almost none of them use the same names. The question they are all answering is simple: where does the customer drink it?
Get this distinction right and the rest of the licensing maze becomes navigable. Get it wrong and you can spend months applying for a license that does not permit the business you actually plan to run.
The basic split
On-premises, sometimes called on-sale, covers alcohol consumed where it is sold. Bars, restaurants, hotels, clubs, taprooms and nightclubs need this.
Off-premises, sometimes called off-sale, covers alcohol sold in sealed containers for consumption somewhere else. Liquor stores, wine shops, supermarkets and convenience stores need this.
Some licenses cover both, in limited ways. In California, a Type 47 restaurant license “authorizes the sale of beer, wine, and distilled spirits for consumption on the licensed premises” and also “the sale of beer and wine for consumption off the licensed premises.” So a restaurant can sell a bottle of wine to take home, but not a bottle of gin.
How states label it
The labels change at the state line. Here are real examples from the states with the busiest license markets.
California uses numbered types. Type 47 and Type 48 are on-sale general, for restaurants and for bars and nightclubs. Type 41 and Type 42 are on-sale beer and wine, again split between restaurants and public premises. Type 20 is off-sale beer and wine for stores, and Type 21 is off-sale general for stores selling spirits.
Florida uses a number plus letters. The letters COP stand for consumption on premises, and the number indicates what is covered: 1 for beer, 2 for beer and wine, 4 for beer, wine and spirits. Package sales use other series.
Ohio uses letter classes. C-1 and C-2 are carryout permits for sealed containers. D-1, D-2, D-3 and D-5 are the on premises permits, with the D-5 covering spirits until 2:30 a.m.
Michigan splits take away between SDM for beer and wine and SDD for spirits, with Class C as the main on premises license.
New Jersey uses plenary retail consumption licenses for bars and restaurants and plenary retail distribution licenses for liquor stores, both issued by municipalities.
Arizona uses series numbers. Series 6 is a bar, Series 7 a beer and wine bar, Series 9 a liquor store, Series 10 a beer and wine store, and Series 12 a restaurant.
Different words, same underlying question.
Why the distinction drives cost
The on or off premises split interacts with the second big question, which is whether the license allows spirits, and with the third, which is whether the state caps that license by population.
In quota states, the licenses that allow spirits are usually the capped ones on both sides of the split:
- California limits on-sale general licenses to one per 2,000 county residents
- Florida limits quota beverage licenses to one per 7,500 county residents
- Pennsylvania generally allows one retail license per 3,000 county residents
- New Jersey allows one consumption license per 3,000 municipal residents and one distribution license per 7,500
- Michigan allows one on premises license per 1,500 residents of a local unit
- Ohio allows one D-3, D-4 or D-5 permit per 2,000 population, and one C-1 and C-2 per 1,000
Notice New Jersey’s numbers. Liquor store licenses are capped more tightly than bar and restaurant licenses, which is why package store licenses in New Jersey are so valuable.
Beer and wine licenses, on both sides of the split, are usually outside the quota, and that is the main reason they cost so much less.
Matching the license to the business
A restaurant that wants cocktails needs an on premises license that allows spirits: a California Type 47, a Florida 4COP, an Ohio D-5, a Michigan Class C, an Arizona Series 12.
A bar or nightclub with no meaningful food business needs a public premises license, such as a California Type 48 or an Arizona Series 6. These normally exclude minors.
A liquor store needs off premises with spirits: a California Type 21, a Michigan SDD, an Arizona Series 9, a New Jersey plenary retail distribution license.
A supermarket or convenience store that only wants beer and wine needs the lighter off premises license, such as a California Type 20 or an Arizona Series 10.
A brewery taproom, winery or distillery sits in a different family again, because production licensing comes with its own rules and usually some limited on site sales rights.
A caterer or event operator typically works from a catering or event permit attached to an existing license, such as California’s Type 58 caterer’s permit.
Rules that follow the split
The distinction affects more than product range.
Minors. Restaurant licenses generally allow minors. Public premises licenses generally do not. In California, minors “are not allowed to enter and remain” under Types 42 and 48.
Hours. Many states set different hours for on and off premises sales, and some tie later hours to specific permits. Ohio’s D-5 runs to 2:30 a.m., while D-1, D-2 and D-3 stop at 1:00 a.m. unless a D-3A is added.
Sunday sales. Some states require a separate permit or a local vote. Ohio’s D-6 is exactly that.
Food requirements. Restaurant licenses often require a real kitchen and substantial meal sales. California requires a “bona fide eating place” with “suitable kitchen facilities” for Types 41 and 47. Florida’s special restaurant license requires at least 51 percent of food and beverage revenue from food and non-alcoholic drinks.
Server training. Many states require certified staff, and the requirements can differ between on and off premises.
Businesses that sit between the two
A few models do not fall cleanly on one side, and they are where owners most often pick the wrong license.
Taprooms and brewpubs. Producing alcohol is licensed separately from selling it. Most states give breweries and wineries limited rights to sell their own product on site, and sometimes to sell it to go, but those rights vary and often come with volume limits.
Bottle shops with a tasting bar. Selling sealed bottles is off premises. Pouring a glass to drink at the counter is on premises. Some states have a tasting permit for exactly this, such as Ohio’s D-8 for tasting samples of beer, wine and mixed beverages, at $500 a year.
Restaurants selling cocktails to go. Several states changed their rules in recent years to allow it, some temporarily and some permanently. Do not assume your license covers it. Check the current rule in your state before you put it on the menu.
Grocery and convenience stores. These are off premises, but the product range allowed differs sharply by state, and some states restrict spirits to dedicated stores entirely.
Hotels, clubs and venues. Many states have licenses written specifically for them, often outside the population quota. Pennsylvania exempts hotels, airports, golf courses, performing arts facilities and others from its quota, and Ohio exempts several categories under section 4303.29.
If your concept sits in one of these gaps, the license type page on your state agency’s site is the fastest way to find the category that fits, because these hybrid licenses rarely appear in general guides.
Planning around it
Before you sign a lease, answer these in order:
- Where will the customer drink it? That sets on or off premises.
- Do you need spirits? That usually decides whether a quota applies.
- Is your area at its cap? Check the state’s availability data, where it is published.
- What will it cost? State fee if licenses are available, market price if not.
- Does the license allow your hours and your days? Late night and Sunday can be separate questions.
- Do minors need to be allowed in? If yes, avoid public premises licenses.
If step three lands on a full quota, you are buying rather than applying, and the county matters more than the state. You can compare what is listed, by state and license type, at Liquor License Hub, and our services page explains how we help buyers work out which license actually fits. Questions about a specific concept are welcome through our contact page.
Frequently asked questions
What does off premises mean on a liquor license? It means alcohol is sold in sealed containers for consumption somewhere other than the place of sale, which is how liquor stores, wine shops and supermarkets operate.
Can one license cover both on and off premises sales? Sometimes, in limited ways. California’s Type 47 allows spirits on premises and beer and wine to go. Ohio’s D-5 allows beer, wine and mixed beverages in sealed containers to go, with spirits for on premises only.
Which is cheaper, an on premises or off premises license? Neither is universally cheaper. Cost is driven by whether spirits are included and whether the state caps that license. In New Jersey, distribution licenses for liquor stores are capped more tightly than consumption licenses.
Do minors have to be excluded from an on premises business? It depends on the license. Restaurant licenses usually allow minors, while bar and public premises licenses usually do not.
Do I need a separate license to sell bottles to go from my restaurant? Often the restaurant license itself allows limited off sale of beer and wine, but not spirits. Check your state’s exact wording before advertising bottles to go.
Is a beer and wine license limited by population? Usually not. Population quotas in most states target the licenses that allow spirits, which is why beer and wine licenses cost far less.
How do I know which class my state uses? Look for a license types or permit classes page on your state alcohol agency’s site. Every state publishes one, and it is the authoritative list.
Sources and further reading
- California ABC license types
- Ohio Division of Liquor Control permit class types
- Ohio Revised Code section 4303.29
- Florida Statute 561.20
- Arizona Revised Statutes 4-203
- PLCB quota system
This article is general information, not legal advice. License names and rules vary by state. Confirm details with your state alcohol agency or a licensed attorney.
