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Coveted Utah alcohol licenses soon can be bought and sold
Alcohol » Utah law, taking effect July 1, will allow the holder of a state license to sell it to a qualified buyer.

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UDABC staffers also have planned a session in mid-May to determine how to handle the specifics of the law, including the applications process, operational requirements, fees and notification of creditors.

Ashby said buyers will have to "go through the application process and meet all the statutes" before getting the liquor commission approval.

At a glance

Buying and selling alcohol licenses

Beginning July 1, a new state law allows those who hold a state alcohol license to sell it to a qualified buyer. Here are some of the restrictions:

» Alcohol licenses can be sold to another person whether it is for the same location or a different premise. However, the license must remain in the same county as issued.

» The buyer must meet a list of qualifying factors to hold the license and must have satisfied all tax debts.

» The buyer must begin operations within 30 days or forfeit the license.

» There is a transfer application fee of $300.

» The seller must notify all creditors that the license is being transferred; unpaid creditors can file claims.

» All transfers are subject to approval of the state liquor commission.

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That is especially true if the buyer plans to move the license to a new location. In those cases, according to the law, the UDABC will have to ensure — among other things — that the transfer stays within the same county, that the new location is the correct distance from churches and schools and that the new owners are not delinquent in taxes or payments to creditors and lien holders.

Other questions » Dave Morris, owner of Salt Lake City’s Piper Down and president of Utah Hospitality Association, said the new law "raises tons of interesting questions."

There are tax issues, he said. "If I paid $300 for my liquor license and if I sell it for more, do I have to pay capital gains?"

It also could create a whole new business of alcohol license brokers, who would connect buyers and sellers, similar to a real estate agent.

Morris said the law "definitely satisfies a need" because of the current club-license shortage.

"But it’s an artificial shortage," he said. Lawmakers, he noted,could simply adjust the population requirement — or eliminate the Zion Curtain — and the list would dwindle quickly.

But until then, the free market will determine the price.

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"You can try to sell it for $60,000 and if no one takes it, you’ll have to lower your price," Morris said. "But if the Winter Olympics come back, you can bet licenses will go up to the $200,000 range." Morris also believes there will be "crazy entrepreneurs" who will try to find a loophole in the law. "They will be sneaky and resort to backdoor politics" to get a license, he said.

"But if there’s holes in this thing," he said, "I guess we’ll find out."

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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