Alcohol

Licensing Laws & Requirements

The alcoholic beverage licensing process in Iowa is a cooperative effort between the license applicant, local authority (city or county) and the Iowa Alcoholic Beverages Division.

Renewing the License

License applicants are encouraged to submit their renewal application to the local authority well in advance of license expiration. Licensees who hold an annual alcoholic beverages license receive a 60-day notice of renewal from the Division.

Applicants must complete two sets of applications - one copy for the Iowa Alcoholic Beverages Division and one copy for the local authority. All questions must be answered even if the applicant feels the information is unimportant or does not apply to them. Applications ask only for information necessary to determine whether or not the applicant and the proposed premises meet legal licensing requirements.

The ownership and conviction questions on the license application must be fully completed. License applicants must show 100 percent ownership of the business. All convictions for violations of state and federal laws must be listed for each person named in the ownership question. Applicants with no convictions should write NONE. Leaving this question blank or writing N/A (not apply) will cause the application to be returned without issuance of the license.

The Division encourages license applicants to complete their own applications. If the applicant relies on an insurance agent or another party to complete the application, the applicant must verify the information before signing the application. False or misrepresented information may result in license denial.

The application and all required documents must be submitted in one envelope to avoid delay in issuance of the license. Licensees with questions as to which documents are required or the correct amount of the license fee should contact the local authority or the Division toll-free at 866.IowaABD.

Non-Renewals Going out of Business

Licensees who are not planning to renew their license, should notify the local authority (city clerk or county auditor) or the Division, as the information is necessary to update permanent licensing records.

LICENSING REQUIREMENTS

Background Investigations

Local authorities (cities and counties) and the Iowa Alcoholic Beverages Division conduct background investigations to determine if applicants and their proposed premises meet licensing requirements. Although time-consuming, these background investigations play an important role in the issuance of licenses. Background investigations protect both the licensee and the public.

Applicant Requirements

To be eligible to hold a liquor, wine, or beer license, the license applicant is required to meet the standards of ‘good moral character’. Under Iowa law, applicants are considered to be of ‘good moral character’ if the licensee fulfills the following criteria:

  • Is a U.S. citizen and an Iowa resident, incorporated to do business in the state. The corporation must be registered and in good standing with the Iowa Secretary of State's office.
  • Has not been convicted of a felony during the past five years. If an applicant has a felony conviction, the applicant is not eligible to hold an Iowa alcoholic beverages license unless the felony conviction is more than five years old and the applicant's rights of citizenship have been restored.
  • Has not had any financial interest in an Iowa liquor, wine or beer license, that was revoked during the past two years.
  • Has ‘financial standing’ and ‘good reputation’ to indicate that the applicant will comply with all laws and rules governing the license.

Note: In evaluating the applicant's 'financial standing,' the local authority and the Division may consider verified sources of financial support and adequate operating capital for the licensee's business, record of prompt payment of state and local taxes, fees and charges for municipal utilities and municipal services, etc. In evaluating the applicant's 'good reputation,' the local authority and the Division may consider pattern and practice of disregard for the law including convictions for sales to intoxicated persons, operating a motor vehicle while under the influence of alcohol or drugs, etc.

All requirements apply to all officers, directors and shareholders of a corporation, all general partners in a partnership, and to the applicant's spouse (with exception of citizen and resident requirements) if the business is operated under a sole proprietorship.

Premises Requirements

To meet licensing requirements, the proposed licensed premises must conform to all applicable state laws, local ordinances, and health and fire regulations. Licensed premises must meet the following criteria:

  • Premised must be owned or under the control of the applicant.
  • Within the jurisdiction of one approving local authority.
  • Kept clean, free of litter, and in good repair.
  • Have toilet facilities for men and women.
  • Equipped with running water from a source approved by the local health department.
  • Have tables and chairs sufficient to seat a minimum of 25 people at one time. (On-premises establishments only.)

Iowa Code sections 123.3(26), 123.30, 123.128, 123.129 and 123.176, and 185-4.4 Iowa Administrative Code

OWNERSHIP INFORMATION

A Personal Privilege

Under Iowa law, liquor, wine and beer licenses are considered a personal privilege. The individual, partnership or corporation who actually owns and receives the proceeds of the alcoholic beverages sales must hold the license.

Any change of ownership, including partial change of ownership must be reported to and approved by the local authority (city council or county board of supervisors) and the Iowa Alcoholic Beverages Division. Change of ownership must be reported when it occurs, not at license renewal time.

A new owner may not operate under the previous owner's license. Operating under another individual’s license may result in suspension or revocation of that license and may disqualify the new owner from holding a license.

Iowa Code section 123.38

Change of Ownership

If the ownership of a licensed establishment is changed in some manner, the Division requires certain information documenting the change. Without proof of the change, new and renewal licenses cannot be issued. The following documents must be submitted to the Division and the local authority (city clerk or county auditor) when there is change of ownership:

  • Corporations - minutes of corporate meetings reflecting resignation of the previous officers and directors and election of the new officers and directors, along with copies of the transfer of shares of corporation stock.
  • Partnerships - dissolution of partnership or notarized affidavit from the partner leaving the partnership, and amended trade name document.
  • Individuals - cancellation of the existing license by the previous licensee; or, copy of the finalized sales contract, bill of sale or warranty deed; and/or copy of lease agreement.

When change of ownership is due to divorce or death, a copy of the divorce decree or death certificate is required. (Divorce decrees will be returned to the applicant and will not be made a part of the permanent licensing record.)

When new partners are added to partnerships or new officers, directors or shareholders are added to corporations, the new partner, officer, director or shareholder must complete the ownership and conviction questions on a new application. This provides the local authority and the Division with the information necessary to determine if the new individuals meet licensing requirements.

Iowa Code section 123.38 and 185-5.7 Iowa Administrative Code

ADDITIONAL LICENSE PRIVILEGES

Sunday Sales Privilege

Licensees who wish to sell and/or serve alcoholic beverages on Sundays must apply for a Sunday sales privilege. Only Class E liquor licenses and Class B wine permits automatically include a Sunday sales privilege. (Class E liquor licensees who hold a Class C beer permit must obtain a Sunday sales privilege for Sunday beer sales.)

The words 'Sunday sales privilege' will be printed at the bottom of the license if the licensee has met all requirements for Sunday alcoholic beverages sales. The Sunday sales privilege is not a stand-alone license. It only extends the number of days on which the licensee may sell alcoholic beverages. The Sunday sales privilege expires with the license and must be renewed annually.

Sunday hours are from 8 AM on Sunday to 2 AM on the following Monday. The same laws and regulations that govern the regular license govern the Sunday sales privilege.

Iowa Code sections 123.36(6), 123.49(2)(b) and (k), and 123.134(5)

Brew Pubs Special Class “A” Beer Permits

Brewpubs are licensed on-premises establishments that are also licensed to manufacture beer. The beer may be sold at retail to patrons for consumption on the premises, and to licensed wholesalers for resale to other on- and off-premises retail licensees. Iowa law allows Class C and Class B beer permittees to apply for and obtain a brewpub license. No other licenses qualify.

The words 'brew pub privilege' will be printed at the bottom of the license if the licensee has met all the requirements for a brewpub. The brewpub privilege is not a stand-alone license. It expires with the license and must be renewed annually.

Iowa Code section 123.130

Catering Privilege

 

A Catering Privilege may only be added to a 12-month class B or C liquor license. A Catering Privilege allows the licensee to act as the agent of a private social host for the purpose of providing and serving alcoholic beverages at private social gatherings in a private place.  The licensee must serve food with the alcoholic beverages.  All food and beverages must be served without cost to the guests.  Neither the licensee nor the social host may ask guests to make donations in payment for food or alcoholic beverages.

For the purpose of the Catering Privilege, a private social gathering is one that meets all of the following criteria:

  • The place for the social gathering is not a licensed alcohol beverage establishment.
  • The general public does not have access to the private social gathering.
  • Persons attending the social gathering are limited to the social host and the host’s bona fide guests.
  • Goods and services are not purchased or sold by or to the guests during the social gathering.
  • Guests are not charged or responsible for payment of any fees, fares, ticket prices or donations to attend the gathering.
  • The caterer does not pay rent or other charges for use of the private place.  (A private social host may rent a place for a private social gathering, and is solely responsible for any rent or other charges for the private place).

Examples of private social gatherings held in private places include: 

  • Parties held in private residences
  • Wedding receptions held in churches
  • Business parties held in unlicensed private business offices or buildings

123.95  PREMISES MUST BE LICENSED -- EXCEPTION AS TO

CONVENTIONS AND SOCIAL GATHERINGS.

  1. A person shall not allow the dispensing or consumption of alcoholic liquor, except wines and beer, in any establishment unless the establishment is licensed under this chapter or except as otherwise provided in this section.  The holder of an annual class "B" liquor control license or an annual class "C" liquor control license may act as the agent of a private social host for the purpose of providing and serving alcoholic liquor, wine, and beer as part of a food catering service for a private social gathering in a private place.  The holder of an annual special class "C" liquor control license shall not act as the agent of a private social host for the purpose of providing and serving wine and beer as part of a food catering service for a private social gathering in a private place. The private social host or the licensee shall not solicit donations in payment for the food or alcoholic beverages from the guests, and the alcoholic beverages and food shall be served without cost to the guests.  Section 123.92 does not apply to a liquor control licensee who acts in accordance with this section when the liquor control licensee is providing and serving food and alcoholic beverages as an agent of a private social host at a private social gathering in a private place which is not on the licensed premises.
  2. An applicant for a class "B" liquor control license or class "C" liquor control license shall state on the application for the license that the licensee intends to engage in catering food and alcoholic beverages for private social gatherings and the catering  privilege shall be noted on the license or permit.  A licensee who engages in catering food and alcoholic beverages for private social  gatherings shall maintain a record on the licensed premises which includes the name and address of the host of the private social gathering, and the date for which catering was provided.  The record maintained pursuant to this section shall be open to inspection pursuant to section 123.30, subsection 1, during normal business hours of the licensee.
  3. However, bona fide conventions or meetings may bring their own legal liquor onto the licensed premises if the liquor is served to delegates or guests without cost.  All other provisions of this chapter shall be applicable to such premises.  The provisions of this section shall have no application to private social gatherings of friends or relatives in a private home or private place which is not of a commercial nature nor where goods or services may be purchased or sold nor any charge or rent or other thing of value is exchanged for the use of such premises for any purpose other than for sleeping quarters.  

 

Outdoor Service Areas

Outdoor service areas are designated areas adjacent to licensed premises. Outdoor service areas are considered extensions of existing licensed premises. They are not automatically included as part of the licensed premises.

Licensees may not sell or serve any alcoholic beverages in an outdoor area until they have met licensing requirements by filing the following documents with the Iowa Alcoholic Beverages Division:

  • 'Application for outdoor service area,' approved and signed by the city council or county board of supervisors.
  • A sketch of the outdoor area showing boundaries of the area and its relationship to the licensed premises.
  • Endorsement from the licensee's insurance company certifying that the dram shop insurance covers the outdoor service area. (Endorsement is required only when dram shop insurance is required for the class of license the licensee holds.)

The words 'outdoor service area' will be printed at the bottom of the license if the licensee has met all requirements for an outdoor service area.('outdoor service area' will not be reflected on the license if the outdoor area is to be used for less than a two-week period.) Outdoor service areas are not stand-alone licenses. They expire with the license and must be renewed annually.

Note: While the city council or county board of supervisors has the discretion to approve or deny a licensee's 'application for outdoor service area', denied applicants may appeal the denial to the ABD.

Iowa Code section 123.3(20) and 185-4.13 Iowa Administrative Code

License Transfers

Although liquor, wine and beer licenses may not be transferred from one person to another, they may be transferred from one location to another.

Licenses may be transferred only within the boundaries of the approving local authority. If the license application approval was from a county board of supervisors, the license may be transferred only within the unincorporated area of the same county - not to an incorporated city within that county. If the license application was approved by a city council, the license may be transferred only within the same city - not to an unincorporated area of that county or to another incorporated city.

Licensees may transfer their license to another qualified premises by filing the following documents with the Iowa Alcoholic Beverages Division:

  • 'Application for transfer of liquor license, wine permit or beer permit,' approved and signed by the local authority.
  • Sketch of the new location showing the bar, openings to other rooms, exits, restrooms, tables and seats and storage area.
  • Endorsement from the licensee's insurance company certifying that the dram shop insurance is transferred to the new location for the same period that the license is transferred. (Endorsement is required only when dram shop insurance is required for the class of license that is transferred.)

The above documents must be filed with the Division before selling, serving, or dispensing alcoholic beverages at the new location.

Licensees must limit the selling and serving of alcoholic beverages in the new location to the dates of transfer that have been approved by the local authority (city council or county board of supervisors). All selling and serving of alcoholic beverages must cease at the original location during the period of the transfer. Only those alcoholic beverages permitted by the license may be sold on the premises to which the license has been transferred.

Transfers may be temporary (24 hours to seven days) or permanent. If the transfer is permanent, the Division will issue an amended license reflecting the new address.

Iowa Code section 123.38 and 185-4.18 Iowa Administrative Code

Living Quarters Permit

When living quarters are accessible from the inside of a licensed establishment, the licensee must file a 'living quarters permit' with the Division. The permit separates the private living quarters from the licensed premises and protects the licensee (or resident) from searches without warrant of the private living quarters. Law enforcement officials must obtain a search warrant before they can search the area designated as a private living quarters.

Licensees may not store liquor, wine, or beer (business inventory) in the area designated as the living quarters. All books and records with regard to the alcoholic beverages business must remain in the part of the building designated as the licensed premises - not in the living quarters.

The words 'living quarters' will be printed at the bottom of the license if the licensee has filed a living quarters permit with the Division.

Iowa Code sections 123.30(2) and 185-5.6 Iowa Administrative Code

Special-Event Licenses

Qualified persons wanting to sell and dispense alcoholic beverages at a town celebration or other special event must obtain a five-day license. Five-day licenses are valid for a period of five consecutive days with exception of a Sunday, which may fall within the five-day period. License applicants wanting to sell alcoholic beverages on a Sunday within the five-day period, must also obtain a Sunday sales privilege.

Licensing requirements for five-day licenses are the same as the requirements for annual licenses of the same class. The only difference is the license is valid for a shorter period of time. Special event licenses may be issued for on-premises licenses only.

Note: License applicants also may apply for and obtain 14-day special event licenses; and, six- and eight-month seasonal licenses. Licensing requirements for seasonal licenses are the same as the requirements for annual licenses of the same class. Seasonal licenses are not renewable. A two-month period must elapse before another six- or eight-month seasonal license may be issued to the same premises.

Iowa Code section 123.34

OTHER LICENSES REQUIRED

In addition to the liquor, wine, or beer license issued by the Iowa Alcoholic Beverages
Division, licensees may also need to obtain the following licenses or permits:

  • Sales Tax Permit (Iowa Department of Revenue and Finance, 1.800.367.3388 or 515.281.5777).
  • Food Establishment or Food Service License (Iowa Department of Inspections and Appeals, 515.281.6538).
  • Federal Special Occupational Tax Permit (Alcohol and Tobacco Tax and Trade Bureau, 513.684.2979).
  • Federal Basic Wholesalers' Permit (Alcohol and Tobacco Tax and Trade Bureau, 513.684.3337).

Note: Federal Basic Wholesaler's Permits are required only for Class E liquor licensees who sell liquor to on-premises licensees.

Many local authorities (cities and counties) have additional licensing requirements. Licensees must contact the city clerk or county auditor to determine if there are additional licenses (dance permits, cigarette permits, etc.) required.