Liquor Licensing


​One of the many services a city provides is licensing liquor establishments in its community. Knowing the various rules and regulations that are involved will lead to an efficient licensing process.

Catering Privilege – Code of Iowa Section 123.95

A Catering Privilege may only be added to a 12-month class B or C liquor license. ACatering 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
Hours of Sale – Code of Iowa Chapter 132.49(2)(b)

Spirits, wine and beer may not be sold, served or consumed on a licensed premise outside the legal hours of sale. The law applies to licensees, permittees, employees, agents and patrons. Most often, violations stem from employees of a bar or restaurant drinking in the establishment after closing time. Prohibited hours of sale are between 2 a.m. and 6 a.m., Monday through Saturday and 2 a.m. to 8 a.m. on Sundays.

Access to the Licensed Permits – Code of Iowa Chapter 123.30(1)(b)

Liquor licenses and wine or beer permittees must give consent to several entities to enter areas of the premises where alcoholic beverages are stored, served or sold, during business hours, without a warrant, including:

  • Fire Department
  • Police Department
  • Health Department
  • Building Inspector
  • County and Deputy Sherriff
  • Department of Public Safety
  • Alcoholic Beverages Division
  • Department of Inspections and Appeals
  • Police Officers
  • Official County Health Officers

These entities may inspect for violations of the Iowa liquor code and ordinances of cities or boards of supervisors. A warrant is required for inspection of private records, a private business office or attached living quarters.

Outdoor Service Areas – Code of Iowa Chapter 123.3(20) and Chapter 185 of the Iowa Administrative Code

Outdoor service areas are designated areas that are adjacent to a licensed premises and include patios and beer gardens. Outdoor service areas are considered extensions of existing licensed premises. They are not, however, 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 Alcoholic Beverages Division:

  • Applications for outdoor service area approved and signed by the city council or county board of supervisors
  • Sketch of the outdoor area clearly showing boundaries of the area and its relationship to the licensed premises
  • Endorsement for 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)
Nuisance Bars

Code of Iowa Section 123.39 allows the local authority or the administrator of the Alcoholic Beverages Division of the Department of Commerce to suspend or revoke a liquor license or permit, or impose a civil penalty not to exceed $1,000 per violation, for a variety of causes which includes violation of any of the provisions of Chapter 123 of the Code. Section 123.49(2) (j) prohibits persons or clubs holding a liquor license or permit from knowingly permitting or engaging in any criminal activity on the premises covered by the license or permit. Consequently, allowing criminal activity on licensed premises is a liquor license violation and may be considered by the licensing authority when determining whether to renew, suspend, revoke or deny a liquor license.

The absence of security personnel on the licensed premises is insufficient, without additional evidence, to prove that criminal activity which occurred on the licensed premises was knowingly permitted in violation of Section 123.49(2)(j). Moreover, the law requires that the licensee knowingly engaged in or permitted such illegal activity. This is a stringent standard: it is not sufficient to prove that a licensee should have known or could have concluded that criminal activity was taking place.

Licensing authorities are not allowed to file criminal or civil charges against nuisance bar licensees. They are allowed, however, to review whether criminal activities are knowingly engaged in or permitted by a liquor licensee on the licensed premises in determining whether to renew, suspend or revoke a liquor license or permit.

In order for a licensing authority to revoke, suspend, deny or refuse to renew a liquor license or permit based upon Section 123.49(2)(j), due process must be followed. In this case, the licensee must be notified of the claimed violation and proposed action – revocation, denial, suspension, refusal to renew – and they must be provided with a hearing. At the hearing the liquor licensing authority must prove that a crime occurred on the licensed premises, including parking lots and areas adjacent to the licensed premises, and must also prove that the liquor licensee, or the licensee’s agents or employees, knew about the criminal activity and either engaged in or permitted the criminal activity.

The Iowa Alcoholic Beverages Division provided information for this page.




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