TWIN FALLS – Daniel Fuchs received the past two liquor licenses awarded in Twin Falls. He’s probably going to get the next one too.
Fuchs put three companies on the state’s waiting list at the same time in 2012. He and his brothers own each of them. While the state forbids a person or company from having their name on the list more than once, it’s OK to list multiple companies with the same ownership.
When the next license becomes available, it’ll bring Fuchs’ total number of liquor licenses in Twin Falls up to four.
But for others who own just one business, the wait for a liquor license can be a long one. The next two applicants on Twin Falls’ waiting list after Fuchs have also been on it since 2012, but they’ll likely have to wait a few more years to get an offer.
That’s because the state of Idaho restricts the number of liquor licenses a city can supply, and it takes a healthy population boost — an additional 1,500 residents — for a city to permit another establishment.
Fuchs and his brothers got a license for Daniel S Fuchs LLC (Marilyns) in 2016, and a license for K2RED LLC (Pandora’s Legacy) this year. Up next is Danbar LLC, a real estate company.
“This wasn’t a very long wait,” Fuchs said.
By comparison, in remote parts of Idaho, some applicants have been waiting since 1962 to get a license, said Nicole Harvey, licensing supervisor for Idaho State Police’s Alcohol Beverage Control. And they’ll continue waiting until their city’s population increases enough to support another license.
The good news for future licensees: Idaho’s population is steadily climbing, and businesses don’t hold onto their licenses forever. Each year, Idaho issues or reissues more than 1,000 liquor licenses, and as population grows, the state’s liquor consumption is at an all-time high.
So how do you pursue a liquor license in Idaho? Here’s what you need to know:
1. How many licenses are allowed in your city?
Every incorporated city in Idaho receives two liquor licenses just for being incorporated. For every additional 1,500 residents the city has, the state allows an extra license. Population estimates are provided annually by the U.S. Census Bureau.
ISP is in charge of managing the licenses for bars. Every year, ISP collects census data and decides by mid-July whether it can offer any more licenses in each city. In Twin Falls last year, K2RED LLC was the only applicant to receive an offer.
Typically, offers are accepted by mid-October, Harvey said.
If a city’s population decreases, so can its number of liquor licenses.
“We don’t take them away,” said Brad Doty, bureau chief for Idaho State Police Alcohol Beverage Control. “If one goes away, we just don’t give it back.”
In other words, if a business lost its license or closed, ISP would not reissue that license if the population no longer supported it.
State code also allows for a specialty liquor license for certain public gathering places. Outside of city limits, a specialty license is the only license available. Convention centers, which must be within the limits of a city that has a population of at least 3,000, can receive a liquor license, but there can be only one per city.
Golf courses and resorts, on the other hand, have no liquor license limit, as long as the state approves each request.
2. Is there a waiting list?
The first step in obtaining a liquor license is determining whether your city has a waiting list. If so, offers are made on a first-come, first-served basis. If an offer is rejected, the next business on the waiting list will receive the offer.
To get on the waiting list, you will have to fill out an application and make a one-time payment of half of the annual liquor license fee. In Twin Falls, Harvey said the payment would be $375.
“It’s completely refundable if somebody changes their mind,” she said.
And if you’re not ready by the time you get selected, you can ask to be put at the bottom of the waiting list.
But it can take a long time to get an offer. Harvey recalled an applicant in Lewiston who died and deeded the spot on the waiting list to his or her children. The children were able to use that license when it was granted years later.
3. Are there liquor licenses up for sale or trade?
Liquor licenses can be traded like an asset. So if someone wants to forgo the waiting list, that person can make an offer outright to the owner of an existing license.
How do you know if someone is willing to sell? There are brokers that specialize in those deals, Harvey said. You can even find offers on Craigslist sometimes — but make sure you do your research first.
While business owners can sell their licenses for whatever price they want, 10 percent of the purchase price funnels back to the state.
Licenses can be pretty costly. Some businesses in Twin Falls estimate licenses now cost anywhere from $125,000 to $200,000. If a business cannot afford to buy one outright, it can opt to lease a license from someone else. The liquor license gets transferred to the lessee for the length of the contract.
Lessees of liquor licenses, Doty said, must undergo the same screening processes as every license holder.
4. What’s the application process like?
“The foundation of any license is a beer license,” Doty said.
So before you can get a liquor license, you must obtain a beer license and pay that $50 annual fee. The on-premise liquor consumption license can then be added onto that. Beer before liquor.
The state application requires a background check and fingerprinting, and you cannot have violated the state’s liquor laws in the past. Once your state beer and liquor licenses are approved, you also have to get county and city licenses before you can start running a business. Each of these licenses must be renewed annually, with associated fees.
A catering permit would allow you to sell liquor for consumption at events, but you still have to have a general liquor license before receiving a catering license. Each county or city has its own restrictions on catering permits, and there are restrictions on the number of days you can cater liquor.
Doty noted that the intent of a catering license is for events and parties — not to allow businesses to have another remote business location.
5. Can you lose a license?
If you are convicted of a violation of Idaho statutes’ Title 23, even on a first offense, your liquor license could be revoked.
If the violation was by an employee, the business could face a 10-day suspension on a first offense. That revocation escalates to 30 days on a second violation and 180 days on a third violation.
An owner found guilty of a violation will have the opportunity for a separate hearing with ISP.
The state will also take away a liquor license if your business closes and you don’t sell or transfer the license within 90 days.
Suspensions for active businesses aren’t unheard of in Twin Falls. In 2015, Canyon Crest Dining and Event Center was found guilty of a Title 23 violation for hosting “The Ultimate Male Revue,” a nude dance performance. Idaho code bars nudity in businesses licensed to sell alcoholic beverages.
Canyon Crest had its liquor license suspended for 21 days, and was fined $15,000.
6. Can you have a license and not use it?
Short answer: No.
Excluding specialty licenses, when you get a liquor license, the state requires you to run a business with that license for at least six days a week, eight hours a day, for the first six months.
“That ensures that you’re not parking a license,” Doty said.
So if your plan is to just hang onto a license, and not use it yourself until you can sell it for enough money, that isn’t going to work. The state knows there are a limited number of licenses available and they need to be in use, Doty said.
As Idaho’s sole distributor of liquor, the state doesn’t want to miss out on potential revenues from sales.
After the first six months of owning a liquor license, you have to continually use the license for at least two years before you can lease it out to someone else.