Do You Need a License To Sell Alcohol Online?

More and more customers enjoy the convenience of ordering alcohol online for delivery. However, just like a physical liquor store, selling alcohol online requires you to understand and secure the proper licenses.

So, do you need a license to sell alcohol online? Generally speaking, yes — but the specific requirements depend on your location. 

This blog will help you understand federal, state, and local laws for selling alcohol online, and outline what you need to know to operate your business legally.

Do You Need a License To Sell Alcohol Online?

If you plan to sell alcohol online, you almost certainly need a license. 

Selling alcohol online doesn’t exempt your business from the traditional licensing requirements when operating a brick-and-mortar store. To better grasp what licenses you need, let’s review relevant federal, state, and local regulations.

Federal Regulations

At the federal level, the Alcohol and Tobacco Tax and Trade Bureau (TTB) plays a major role in overseeing the alcohol industry. 

In 1935, the TTB administered the Federal Alcohol Administration (FAA) Act, which established the federal rules and regulations for the production, importation, and sale of alcohol by wholesalers. The TTB also creates alcohol labeling policies to provide accurate consumer information and collects federal excise taxes on alcoholic beverages. 

If you’re planning to ship alcoholic products to customers in other states, you need to read up on how the TTB’s regulations apply across state lines. 

Keep in mind that while federal regulations set a baseline, individual states have significant power to regulate alcohol sales and distribution within their borders.

State Regulations

While federal laws provide a framework on how to sell alcohol online, states also have authority over the sale and distribution of alcohol within their borders. This is where the licensing process to sell alcohol online becomes significantly more complex, as laws can vary widely from state to state.

One of the main differences lies in how states regulate the sale of alcohol. Some states, like Alabama, Iowa, and Virginia, are “control states,” meaning the state government directly manages the wholesale or retail sale of some or all types of alcohol. 

Other states, like Colorado, Massachusetts, and Texas, are “open states,” where private businesses can obtain licenses to sell alcohol within the state’s regulations.

Related Read: What Is an ABC State? 5 Tips for Liquor Store Success

Even within these categories, not every state allows direct shipping to consumers. Some states don’t allow it at all, while others permit it only for beer and wine — and an even smaller number permit it for all types of alcohol. 

States that do permit direct shipping often impose additional regulations like: 

• Volume limits on how much alcohol a consumer can receive
• Requirements that the recipient be present to sign for the delivery and prove they are of legal drinking age
• Prohibitions on shipping to certain areas within the state

States also establish their own rules for delivery hours and days, restrictions on sales to intoxicated persons, and regulations on alcohol promotion and advertising. For example, some states may prohibit the sale of alcohol on Sundays, while others may have specific rules regarding happy hour pricing.

Local Regulations

In addition to federal and state regulations, cities and counties may impose their own rules on alcohol sales, further complicating the compliance requirements for online alcohol businesses.

Local regulations often focus on the specifics of how alcohol can be sold and delivered within a given jurisdiction, including: 

• Zoning restrictions: Certain areas may be off limits for alcohol sales, even if those sales occur online and involve delivery to the customer.
• Local licensing fees: Cities or counties may require their own separate licensing fees in addition to state-level fees.
• Delivery curfews: Some areas may have restrictions on alcohol delivery during certain times of the day or on days of the week.

Local regulations can vary significantly, so relying solely on state or federal regulations isn’t sufficient. Review the specific ordinances of the cities and counties where you operate and deliver to ensure full compliance. 

Related Read: Optimizing Your Alcohol Delivery Business: 9 Steps To Offer Liquor Delivery

Specific Considerations for Online Alcohol Sales

While the basic principles of alcohol regulation still apply, e-commerce businesses may experience challenges that traditional brick-and-mortar stores may not face.

If you’re planning to sell alcohol online, here are some potential considerations to be aware of. 

Age Verification

Online age verification is more complex than simply checking an ID at a counter. You need to implement a robust age verification process to verify customer age both during the online purchase process and at the point of delivery.

To verify customer ages online, you should: 

• Require shoppers to enter their date of birth upon entering the website and again during checkout.
• Use age verification services to verify customer information against public databases.
• Train delivery personnel to carefully check government-issued photo IDs and refuse delivery to underage or visibly intoxicated individuals. 

Your point of sale (POS) software should include age verification capabilities, making it easy to confirm customer ages and stay compliant regardless of location.

Pickup & Delivery Management

Online alcohol sales require options for customer pickup and delivery. While it may sound simple to implement, the logistics require careful management to maintain accurate sales records and keep the process straightforward for customers. 

For online alcohol pickup and delivery, you need to: 

• Track pickup and delivery orders, differentiating them from in-store purchases.
• Schedule deliveries, map efficient delivery routes, and provide customers with accurate delivery timeframes.
• Generate delivery invoices that include all necessary information, such as order details, customer information, delivery address, and any applicable fees.

A POS system like Bottle POS helps manage pickup and delivery orders (both in house and DoorDash), track delivery progress, and create delivery invoices, making the entire process more manageable from start to finish.

Integrated E-Commerce

Selling alcohol online also requires a platform to showcase your products, support online ordering, and manage online transactions. You need a solution that allows you to:

• Create a user-friendly online storefront where customers can make purchases and view product listings. 
• Manage and sync online inventory with your in-store stock to prevent overselling and ensure accurate availability information.
• Process online payments securely and efficiently, offering customers a variety of payment options while protecting sensitive data during the transaction.

Bottle POS offers BottleZoo, an integrated e-commerce platform that lets you create an online store, manage your inventory, and provide both pickup and delivery options to your customers, offering a unified sales experience.

How To Get a License for Online Alcohol Sales

There isn’t a single “online alcohol sales license” — instead, you likely need to obtain a combination of existing licenses and permits, as well as research specific regulations within your area for online sales and shipment of alcoholic beverages. 

In general, you need to:

1. Understand federal requirements: Familiarize yourself with the TTB’s regulations and necessary permits. If your online business involves producing, importing, or wholesaling alcohol, you need to apply for and receive licenses from the TTB before shipping any products.
2. Research state-specific laws: States govern alcohol regulations, so look into the specific rules applicable to your area. Contact your state’s alcohol control board for information on licensing requirements, direct shipping rules, and the application process. 
3. Differentiate license types: Based on your business model and the state you’re operating in, you need to determine which licenses are necessary. This might include:
   • A retail license with an endorsement for online sales or direct shipping
   • A shipping license or permit that specifically allows you to ship alcohol to consumers within or out of state
   • A manufacturer’s or wholesaler’s license if you are producing or distributing the alcohol yourself
   • An e-commerce business license is necessary in some states to conduct business online
4. Prepare your application(s): Once you know which licenses you need, prepare the required applications for both federal and state authorities, which often include business registration papers, tax identification numbers (like an EIN), and potentially a business plan outlining your business structure, ownership, and finances. 
5. Pay applicable fees: Licensing applications at both the federal and state levels typically involve fees. Take your time researching the fee structure for the licenses you’re applying for and submit any required payments. 
6. Undergo background checks: Many alcohol licensing processes involve background checks for the owners and any other key personnel of the business. 
7. Comply with ongoing requirements: Getting your license is just the first step. You’ll likely have ongoing compliance and renewal responsibilities, including regular reporting, tax payments, and adherence to all applicable laws and regulations in the areas where you’re operating. 

Related Read: Understanding Liquor License Renewal Requirements

With the proper preparation, you can navigate all federal, state, and local legalities related to online alcohol sales. When in doubt, consider consulting with a lawyer who specializes in alcohol beverage law to make sure your business meets all requirements. 

How To Start Selling Alcohol Online

So, do you need a license to sell alcohol online? The answer is yes — and while the steps to get it may initially seem complicated, start by researching federal, state, and local laws for every location you intend to sell to, and then follow the application process. 

After securing relevant licenses, you need the right technology to drive your daily operations. Bottle POS is a reliable POS solution for both online and in-store businesses, with features like age verification, online pickup and delivery management, and an integrated e-commerce platform with BottleZoo.

Schedule a free demo with our experienced team to see how Bottle POS supports alcohol retailers just like you.