The Texas Alcoholic Beverage Code is the state statute that governs how alcohol is manufactured, distributed, sold, and consumed in Texas, and it is administered by the Texas Alcoholic Beverage Commission (TABC). It sets the permit categories businesses need, the hours they can sell, the age at which a person can buy, the civil liability that follows overservice, and the penalties for getting any of it wrong. Local option elections add a second layer, so the rules that apply to any given business depend on both the state code and the community where the business operates.
Permits a Business Needs to Sell Alcohol
Texas uses a tiered system. What you need depends on what you do with alcohol: make it, distribute it, sell it for people to drink there, or sell it in sealed containers to take home.
Retail Permits
A Wine and Beer Retailer’s Permit (BG) covers beer, malt liquor, ale, and wine up to 14% or 17% alcohol by volume, for on- or off-premises consumption. It does not cover distilled spirits. The initial state fee is $903 in most counties, but $2,553 in Bexar, Dallas, Harris, and Tarrant counties.1Texas Alcoholic Beverage Commission. License and Permit Fees Chart
To serve distilled spirits on-premises, a business needs a Mixed Beverage Permit (MB). The initial fee is $6,602, dropping to $2,102 by the third renewal.1Texas Alcoholic Beverage Commission. License and Permit Fees Chart Mixed beverage permittees also deal with two separate state taxes: a 6.7% gross receipts tax the business pays, and an 8.25% mixed beverage sales tax the customer pays and the business remits.2Texas Comptroller of Public Accounts. Mixed Beverage Taxes Frequently Asked Questions
A Package Store Permit (P) authorizes malt beverages, wine, and distilled spirits in sealed containers for off-premises consumption only. Package stores can sell non-alcoholic products and conduct other lawful business, but the store may only be open during lawful package store hours.3Texas Alcoholic Beverage Commission. Package Store Permit P and Local Distributors Permit LP The initial state fee is $1,501.
Manufacturer Permits
Breweries operate under a Brewer’s Permit (B) or a Brewer’s License (BW), depending on size and business model. A Brewpub License (BP) is a hybrid: the holder can brew, bottle, and package malt beverages and sell them directly to customers on or off premises, but must also hold a qualifying retail permit such as a BG or MB, and cannot hold a brewer’s or distributor’s license.4State of Texas. Texas Alcoholic Beverage Code Chapter 74 – Brewpub License
Distilleries need a Distiller’s and Rectifier’s Permit (D) to produce and bottle spirits, with limited direct-to-consumer sales on premises.5Justia Law. Texas Alcoholic Beverage Code Chapter 14 – Distillers and Rectifiers Permit Wineries hold a Winery Permit (G) and have the broadest direct-sales privileges: on-premises tasting-room sales (including wines from other wineries or wholesalers), to-go sales, and direct shipping to Texas consumers.6Texas Alcoholic Beverage Commission. Winery Permit G
Permits are issued for a two-year term, and renewal is required on the second anniversary of the issue date.7Texas Alcoholic Beverage Commission. TABC License and Permit FAQs
Hours You Can Sell
Selling outside your permit’s hours is one of the fastest ways to draw a TABC violation. The rules differ by permit type.
Package stores may sell alcohol from 10:00 AM to 9:00 PM Monday through Saturday. They must remain closed all day on Sundays, Thanksgiving Day, Christmas Day, and New Year’s Day. If one of those holidays falls on a Sunday, the closure extends to the following Monday.
Bars and restaurants selling for on-premises consumption can serve from 7:00 AM to midnight Monday through Saturday, and from noon to midnight on Sundays. An establishment that also serves food can begin Sunday alcohol service at 10:00 AM if the drink accompanies a meal.8State of Texas. Texas Alcoholic Beverage Code 105.05 – Hours of Sale Malt Beverages Holders of a Late Hours Permit can serve until 2:00 AM in cities and counties that have adopted extended-hours provisions.9Justia Law. Texas Alcoholic Beverage Code Chapter 105 – Hours of Sale and Consumption
Off-premises beer and wine retailers, including grocery and convenience stores, can sell from 7:00 AM to midnight Monday through Friday, and from 7:00 AM Saturday through 1:00 AM Sunday morning. Sunday sales are allowed from 10:00 AM to midnight.10Texas Alcoholic Beverage Commission. FAQs – Section: Hours of Sale and Consumption The 10:00 AM Sunday start replaced an older noon restriction after a 2021 change in state law.
Age Rules and Underage Drinking
You must be at least 21 to buy or publicly possess alcohol in Texas. Retailers and servers must check a valid government-issued ID before every sale. A narrow exception allows a minor to consume alcohol in the visible presence of a parent, legal guardian, or adult spouse, and only in a private setting. Public possession by anyone under 21 remains illegal regardless of parental supervision.11Texas Alcoholic Beverage Commission. Underage Drinking
Penalties for underage drinking scale with repeat offenses:
- First or second offense: Class C misdemeanor, fine up to $500, mandatory alcohol awareness class, 8 to 40 hours of community service, and a 30- to 180-day driver’s license suspension or denial.
- Third offense (age 17 or older): fine of $250 to $2,000, up to 180 days in jail, and automatic driver’s license suspension.
A minor who fails to complete court-ordered alcohol awareness training after a prior conviction faces a one-year driver’s license suspension.11Texas Alcoholic Beverage Commission. Underage Drinking
Using a fake ID or falsely claiming to be 21 is a separate Class C misdemeanor under Section 106.07, with the same penalty structure and jail exposure after two prior convictions.12State of Texas. Texas Alcoholic Beverage Code 106.07 – Misrepresentation of Age by a Minor
Adults who supply alcohol to minors face far heavier consequences. Making alcohol available to a minor is a Class A misdemeanor punishable by a fine up to $4,000, up to a year in jail, or both, plus an automatic 180-day driver’s license suspension. Anyone 21 or older who knowingly provides alcohol to a minor under 18 can be held civilly liable for damages the intoxicated minor causes.11Texas Alcoholic Beverage Commission. Underage Drinking
Dram Shop Liability for Overservice
Chapter 2 of the Alcoholic Beverage Code creates a civil cause of action against businesses that overserve. If an establishment serves a patron who is obviously intoxicated and that patron injures someone, the injured party can sue the business directly.13State of Texas. Texas Alcoholic Beverage Code Chapter 2 – Civil Liabilities for Serving Beverages
A dram shop claim requires proof of two things: the business served alcohol to a person who was obviously intoxicated to the point of being a clear danger, and that service was a proximate cause of the plaintiff’s injuries. The same liability applies when a business serves a minor who then causes harm. Damages can cover medical bills, lost wages, pain and suffering, and property damage.
Chapter 2 is the exclusive path for these claims against providers who serve adults (18 and older), so plaintiffs cannot bypass it with a common-law negligence theory. Liquor liability insurance can cover legal costs and settlements, but most policies exclude incidents involving service to minors.
Penalties for Business Violations
The TABC enforces the code through administrative and criminal penalties that scale with severity. Minor infractions such as selling outside permitted hours or failing to display required signage typically bring administrative fines.
Selling alcohol to a minor is a Class A misdemeanor with a fine up to $4,000, up to one year in jail, or both.11Texas Alcoholic Beverage Commission. Underage Drinking Selling or delivering alcohol to an intoxicated person carries a fine of $100 to $500, up to one year in jail, or both. A second conviction raises the fine range to $500 to $1,000.14State of Texas. Texas Alcoholic Beverage Code Title 4 – Regulatory and Penal Provisions Either conviction can also lead the county court to recommend permit suspension or revocation to the TABC.
The most severe consequences apply to operating without a permit, illegal distribution, tax evasion, and fraud. These can result in license revocation, felony charges, and jail time. The TABC has broad discretion to suspend or cancel a permit when a pattern of violations emerges.
Safe Harbor for Certified Staff
Seller/server certification is not required by Texas law, but it provides real protection when an employee makes an illegal sale.15Texas Alcoholic Beverage Commission. TABC Certification FAQs Under the TABC’s “safe harbor” policy, the agency will not take administrative action against the permit holder if all of the following are true:
- The person who made the sale is not the owner or an officer of the company.
- That employee holds a valid seller/server certificate from a TABC-approved school.
- All employees involved in selling, serving, or delivering alcohol, and their immediate managers, were certified within 30 days of hire.
- The employer has written responsible-service policies and has ensured every employee has read and understood them.
- The employer did not directly or indirectly encourage the violation.
- Fewer than three similar violations occurred at the location in the preceding 12 months.
Safe harbor protects the business’s permit, but the individual employee who made the illegal sale can still face criminal charges.15Texas Alcoholic Beverage Commission. TABC Certification FAQs
Local Option Rules Change by Community
Texas lets individual communities decide whether and how alcohol can be sold. Through local option elections, voters can make an area dry (no alcohol sales), wet (all types), or partially wet (only certain types, such as beer and wine but no liquor). Results apply at the county, city, or precinct level, which is why alcohol availability can shift from one side of a county line to the other.
Before applying for any permit, confirm the local option status of the specific location. Some jurisdictions that allow alcohol sales still impose additional permit requirements, zoning restrictions, or setbacks beyond what state law mandates. The TABC maintains local option information, but check with the county clerk and the relevant city government before committing to a site.