What is a Safekeeping Liquor License in Pennsylvania?

A safekeeping liquor license in Pennsylvania refers to a license that is temporarily inactive but is still valid and maintained by the license holder. The Pennsylvania Liquor Control Board (PLCB) allows license holders to place their liquor license in “safekeeping” if the licensed establishment is closed or not in operation. This system ensures that the license remains valid while the business is non-operational and gives the owner time to either sell or reopen the business.

Safekeeping Liquor License in Pennsylvania

Here’s an overview of how a safekeeping liquor license works in Pennsylvania and what license holders need to know about the process.

1. When Can a Liquor License Be Put in Safekeeping?

A liquor license in Pennsylvania can be placed in safekeeping under certain circumstances. This typically happens when a licensed business, such as a bar, restaurant, or club, closes or temporarily ceases operations. Common reasons include:

  • Renovations: If the business is undergoing extensive renovations that require closing the establishment for an extended period.
  • Business Sale: If the owner is in the process of selling the business but hasn’t yet found a buyer.
  • Financial Issues: If the business is temporarily unable to operate due to financial difficulties but plans to reopen later.
  • Relocation: If the business is relocating, the license can be put in safekeeping until the new location is ready to operate.

In these cases, placing the license in safekeeping helps the owner retain the license without having to forfeit it or risk losing it.

2. The Safekeeping Process

To place a liquor license in safekeeping, the license holder must file an application with the Pennsylvania Liquor Control Board (PLCB) and adhere to the board’s regulations. The process involves:

  • Filing an Application: The license holder must submit a request to the PLCB, formally placing the liquor license in safekeeping.
  • Initial Safekeeping Period: Once the license is in safekeeping, it is protected for an initial period of up to two years. During this time, the license holder is not permitted to use the license to sell or serve alcohol.
  • Renewal of Safekeeping: After the initial two-year period, license holders can apply for extensions if they need more time to reopen or sell the business. However, after two years, there are annual fees required to keep the license in safekeeping status.

3. Costs and Fees Associated with Safekeeping

While a license is in safekeeping, the license holder is responsible for paying fees to maintain the license’s status with the PLCB. These fees are imposed after the initial two-year period and must be paid annually to keep the license in safekeeping. If the fees are not paid, the PLCB may cancel the license.

In addition to safekeeping fees, the license holder is also required to keep up with renewal fees to ensure the liquor license remains valid, even while in safekeeping.

4. Reactivating a Safekeeping Liquor License

Reactivating a safekeeping liquor license requires the license holder to notify the PLCB and submit the appropriate paperwork to resume operations. The steps include:

  • New Location Approval (if relocating): If the license is being reactivated at a new location, the license holder must secure approval from the PLCB for the new site.
  • Paying Reactivation Fees: Reactivation typically involves additional fees, and the license holder must be up to date on all safekeeping fees and renewals.
  • Compliance with Local Laws: The license holder must ensure that the new location (if applicable) complies with all local zoning and municipal regulations for liquor sales.

Once these requirements are met, the license can be reactivated, allowing the business to resume alcohol sales.

5. Buying or Selling a Liquor License in Safekeeping

Liquor licenses in Pennsylvania are valuable assets and can be bought or sold. When a liquor license is in safekeeping, it can still be sold to another party. In this case, the new buyer would assume responsibility for the license and may transfer it to a new location if needed.

The sale process involves:

  • Transfer Approval: The PLCB must approve the transfer of a liquor license to a new owner or location.
  • Safekeeping Status: The license remains in safekeeping until the new owner is ready to reactivate it.

Safekeeping provides flexibility for license holders who are in the process of selling their business and want to retain the value of the license until the sale is completed.

6. Potential Consequences of Not Using Safekeeping

If a licensed business closes and does not place the liquor license in safekeeping, the license could be forfeited. The PLCB can take action to cancel a liquor license that is inactive and not properly maintained through the safekeeping process. This can result in the permanent loss of the license, meaning the business owner would need to reapply for a new license, which could be costly and time-consuming.

A safekeeping liquor license in Pennsylvania allows businesses to temporarily pause operations without losing their valuable liquor license. Whether due to renovations, a business sale, or relocation, placing a license in safekeeping provides flexibility and security for the license holder. However, it is essential to stay up to date with renewal and safekeeping fees and follow the PLCB’s procedures for reactivating the license when ready. Understanding and using the safekeeping option can help liquor license holders navigate periods of transition while preserving their ability to sell alcohol legally.