Fees current as of September 2026, from the TABC fee schedule and the Tennessee Code. Fees can change, so confirm current amounts with the TABC before you file.
A Tennessee liquor license costs $300 to apply for, plus an annual license fee that runs from $270 to $5,000 depending on the license type and the size of the business. For a typical full-service restaurant, the state license fees land between $950 and $1,500 in the first year.
That figure is accurate, and it still leaves most of the budget out. A new license also brings a local beer permit, a $10,000 minimum tax bond with the Tennessee Department of Revenue, a server permit for every person who pours, and a 15% tax on every drink sold. This guide walks through each cost in the order most businesses meet them and ends with 2 sample budgets.
Still deciding which license you need? Start with Types of Liquor Licenses in Tennessee. For the filing steps, see How to Get a Liquor License in Tennessee.
The short answer
- Application fee: $300, one time, nonrefundable.
- Annual license fee: $650 to $1,200 for a full-service restaurant, based on seats. $2,000 to $5,000 for a bar (a limited service restaurant license), based on food sales.
- Local beer permit: $250 application plus a $100 annual privilege tax.
- Tax bond: $10,000 minimum, posted with the Department of Revenue.
- Server permits: $20 per server, valid for 5 years.
- Ongoing: a 15% liquor-by-the-drink tax on alcohol sales, filed monthly.
What the TABC charges
Every liquor-by-the-drink application carries a one-time $300 fee, paid when you submit through the TABC’s online system (RLPS). The fee is nonrefundable. An application that stays incomplete for more than 45 days may be denied, and reapplying means paying the $300 again.
Once approved, the license carries an annual fee set by state law. The most common:
- Restaurant, 40 to 74 seats: $650
- Restaurant, 75 to 125 seats: $750
- Restaurant, 126 to 175 seats: $925
- Restaurant, 176 to 225 seats: $975
- Restaurant, 226 to 275 seats: $1,100
- Restaurant, 276 seats or more: $1,200
- Wine-only restaurant: $270 to $350, based on seats
- Limited service restaurant (bar): $2,000 to $5,000, based on food sales
- Hotel or motel: $1,000 to $1,500, based on rooms
- Caterer: $625
- Special occasion (nonprofits only): $100 per day
- Festival: $1,000 per day
The full list is on the TABC fee schedule.
Why a bar license costs more
The limited service restaurant license, commonly called a bar license, fits businesses where prepared food makes up 50% or less of gross revenue. Its annual fee scales with how much food you sell:
- Prepared food at 30% to 50% of gross sales: $2,000
- 20% to 29%: $3,000
- 15% to 19%: $4,000
- 0% to 14%: $5,000
Chips, popcorn, and similar snacks do not count as prepared food. At renewal, the business files a sworn statement of the prior year’s food and liquor revenue, and that statement sets the next year’s fee. If food sales slip during the year, the fee can jump at renewal, so track the split as you go. TABC limited service restaurant page
Beer runs through a separate permit
The TABC license covers spirits, wine, and high-gravity beer. Beer at 8% alcohol by weight or less needs a beer permit from your city or county beer board, with its own costs under state law:
- $250 application fee, paid to the city or county and kept whether the permit is approved or denied.
- $100 annual privilege tax, due January 1. A new permit pays it prorated for the months left in the year.
Local beer boards set their own meeting calendars and processes, and some add requirements of their own. Build their timeline into your opening date. MTAS Guide to Alcohol and Beer Laws in Tennessee
The bond most first budgets miss
Before you sell a drink, you register with the Tennessee Department of Revenue for the liquor-by-the-drink tax and post a bond. Since July 1, 2024, the minimum is $10,000. Department of Revenue registration
What that $10,000 actually costs you depends on which of 3 bond forms you choose:
- Cash deposit. You give the Department the full $10,000. It comes back to you eventually, but the money is out of your hands while the Department holds it.
- Certificate of deposit. You pledge a $10,000 CD as collateral. The full amount still has to sit there, though it can keep earning interest.
- Corporate surety bond. A surety company guarantees the $10,000 on your behalf, and you pay it an annual premium. Premiums depend on your credit and commonly run 1% to 10% of the bond, or about $100 to $1,000 a year.
The $10,000 is only the starting point. After the first year, the bond resets to 4 times your average monthly liquor-by-the-drink tax, based on what you actually paid over the prior 12 months. Revenue reviews the amount each year and can raise or lower it, with $10,000 as the floor, and notifies you when it changes. On a cash or CD bond, an increase means posting more money. On a surety bond, it usually means a higher premium at renewal.
Register before you apply to the TABC. The TABC’s own applicant guide recommends it and lists a missing Revenue registration as 1 of the 2 most common reasons approvals slow down. TABC Liquor-by-the-Drink Applicant Guide
The 15% tax on every drink
Tennessee charges a liquor-by-the-drink tax equal to 15% of the sales price of alcoholic beverages sold for on-premise consumption, filed and paid monthly. You can build it into menu prices or add it to the bill. If you add it, guests have to be told that a 15% tax will be added. Department of Revenue: liquor-by-the-drink tax
Half of the tax goes to the state for education. The other half goes to local governments where the drink was sold, and part of that share funds local schools. Guests effectively pay it, but it moves through your books every month, so plan your cash flow around it.
Your city or county may add its own tax
State law authorizes each city and county to collect its own annual liquor-by-the-drink privilege tax, separate from the state license fee and held at 2003 rate levels. Collecting it is optional, so some local governments charge it and others skip it. Ask your city or county whether it collects one before you finalize the budget.
Permits for your staff
Anyone who serves alcohol needs a TABC server permit. It costs $20 and is valid for 5 years, and new hires have 61 days to get one. Budget for turnover, since every new server needs a permit.
Costs that never appear on the fee schedule
- Time. By the TABC’s own numbers, the average application took 38 calendar days from filing to approval in 2023. That clock covers the TABC review alone. Once you add Revenue registration, the beer permit, and local approvals, plan for 60 to 90 days overall, and rent runs the whole time.
- The build-out the inspection checks. Restaurant and bar licenses both require seating for at least 40 people at tables, and a working kitchen.
- Local approvals. Business licenses, health permits, and a certificate of occupancy each carry their own fees.
- A security plan, required for a limited service restaurant license.
- Insurance. Liquor liability coverage is its own line item. Landlords, lenders, and local programs such as Knoxville’s outdoor drinking zones may require it. Talk to your carrier early.
Two sample first-year budgets
A 90-seat full-service restaurant serving beer, wine, and spirits, with 12 servers:
- TABC application: $300
- Restaurant license, 75 to 125 seats: $750
- Beer permit application: $250
- Beer privilege tax: up to $100, prorated
- Server permits, 12 at $20: $240
Fees out the door: about $1,640. Add the $10,000 bond: the full amount if you post cash or a CD, or a surety premium of roughly $100 to $1,000 a year.
A 60-seat bar where prepared food is about 10% of sales, with 8 servers:
- TABC application: $300
- Limited service restaurant license, 0% to 15% food: $5,000
- Beer permit application: $250
- Beer privilege tax: up to $100, prorated
- Server permits, 8 at $20: $160
Fees out the door: about $5,810, plus the same $10,000 bond. Moving prepared food up to 15% of sales would cut the license fee by $1,000. At 30%, it would cut it by $3,000.
These are examples only. Your license type, local fees, and build-out will change the numbers.
Where BevLaw Group fits
Licensing is part of our flat monthly plans: applications, renewals, and defense if a license is ever denied or revoked. That makes the legal line in your budget a number you know up front. We help you pick the right license, sequence the Revenue registration, beer permit, and TABC filing, and keep renewals on schedule.
If you are budgeting for a license now, the best time to talk is before you sign the lease.