How to Start a Bar or Liquor Store in Minnesota: City Licenses, AGED and Fee Caps

If you want to start a bar business in Minnesota, the formation paperwork is the easy part. The alcohol license is the hard part, and in Minnesota that license comes from your city or county, not from a statewide office. Minnesota has no general statewide business license. Filing your LLC or corporation with the Secretary of State is a filing, not a license, and a Department of Revenue tax registration is not a license either. This guide covers the steps in the order most applicants find useful: choose your license type, form your entity, register for taxes, pick a site, file with the city, clear the state permit process, and keep everything renewed.

This article is informational, not legal or tax advice. Liquor licensing is local, and fee schedules change. Confirm every figure with your city or county clerk and the agency named before you sign a lease or spend money on build-out. Because a bar or liquor store involves alcohol regulation, lease terms, and tax decisions, talk with a Minnesota attorney who handles liquor licensing and with a CPA before you commit.

What you need before you start

Gather these items before your first visit to the city clerk. Most delays come from missing paperwork, not from the state or city being slow.

• A business name that meets Minnesota naming rules and is not already taken on the Secretary of State business search at mblsportal.sos.mn.gov/Business/Search.
• An entity choice, usually an LLC or a corporation, with the formation document ready to file.
• A registered office, which must be a Minnesota street address. A PO box by itself is not accepted, and it does not have to match your principal place of business.
• A specific premises, or at minimum a shortlist of addresses. Liquor licenses are tied to a location, and the city checks the site against distance limits.
• Personal information for every owner, officer and manager, including identification. Applicants must be 21 or older and of good moral character.
• Financial records for the investigation the city runs on initial on-sale applications. Ask the clerk which documents it requires, because the list varies by city.
• The city's current application packet and fee table. Get these from the clerk, not from a third-party license service.
• A startup budget that includes the license fee, the entity filing, a sales tax account, and the 6.875 percent state sales tax plus any local taxes on taxable sales.

Step 1: Choose an on-sale or off-sale license

Minnesota cities and counties issue two main kinds of intoxicating liquor license under Minn. Stat. 340A.404. An on-sale license lets customers drink on the premises, which is what a bar needs. An off-sale license lets customers buy to take away, which is what a liquor store needs. Some businesses hold both, but each one is separately issued and separately priced.

The fee rules differ sharply between the two. Off-sale fees have a statutory cap under Minn. Stat. 340A.408, and the cap covers the license fee plus any occupation tax your city charges. The caps are:

City type	Maximum off-sale fee (fee plus any occupation tax)
First-class cities	$1,500
Cities over 10,000 outside the seven-county metro	$560
Other cities over 10,000	$380
Cities from 5,000 to 10,000	$310
Cities under 5,000	$240

On-sale fees are not set by this table. Cities set them locally to cover their costs, so an on-sale fee can differ widely from one city to the next. If you plan to offer wine, know that a wine license cannot exceed half the on-sale fee or $2,000, whichever the statute allows as the limit in your situation. Ask the clerk to show you the wine rule in writing.

Step 2: Form your entity correctly the first time

Most bar and liquor store owners use an LLC or a corporation. Filing is done through Business Filings Online (the Minnesota Business and Lien System) or by mail, and the fees differ by method.

• LLC: File Articles of Organization under Minnesota Statutes Chapter 322C. The fee is $155 online or in person, which is expedited service, or $135 by mail, which is not expedited. The name must include "limited liability company" or "LLC." It cannot include "corporation" or "incorporated" or their abbreviations.
• Corporation: File Articles of Incorporation under Chapter 302A. The filing fee is $155.
• Publication: LLC and corporation formation does not require a newspaper publication.
• Annual renewal: Both entity types file an Annual Renewal that costs $0 and is due every December 31. For an LLC, failing to file by that date results in termination or revocation without further notice. Reinstatement for an LLC costs $65 by mail or $85 online or in person under the current Secretary of State fee schedule. Confirm corporation reinstatement fees on the same fee schedule before you rely on any number.

If you plan to trade under a name that is not your entity name, such as "The Corner Tap," you also need a Certificate of Assumed Name. That is filed only with the Secretary of State. The fee is $50 online or in person or $30 by mail. After filing, the certificate must be published for two successive issues in a qualified legal newspaper in the county of your principal place of business. Failure to publish can make the certificate invalid. The certificate must be renewed each year at no charge. Details are at sos.mn.gov assumed name and DBA page.

Step 3: Register for taxes before your first sale

Minnesota issues no general business license, but you must register with the Department of Revenue for a Minnesota tax ID and a sales and use tax account before you make taxable sales. Bar and liquor store sales are taxable. The state sales tax rate is 6.875 percent, and local taxes are added on top. Register through the Department of Revenue at mndor.state.mn.us new business registration, and see revenue.state.mn.us for general guidance.

How your entity is taxed affects your income tax. An LLC taxed as a partnership or disregarded entity passes income to its owners, who pay the individual income tax at 5.35 to 9.85 percent. An LLC that files federally as a C corporation pays the 9.8 percent corporation franchise tax. A minimum fee under Minn. Stat. 290.0922 applies to C corporations, S corporations and partnerships, but single-member LLCs that report only on the member's individual return are exempt. Check the minimum fee on the Department of Revenue site for your size, because it rises with Minnesota property, payroll and sales. This is informational only. Ask a CPA which structure fits your plan.

Step 4: Choose a site that passes the distance and zoning checks

The site decides whether you can get a license at all. Cities and counties apply location limits near schools and state institutions. Before you sign a lease, ask the clerk for the exact distance rule, how the city measures distance, and whether the rule applies to your property line or your entrance. Get the answer in writing if you can.

Zoning is a separate question from liquor licensing. Ask the city planning office whether the address allows the use you want, whether it allows a bar or liquor store at that address, and whether any conditional use permit or parking requirement applies. Do not assume a liquor license will be issued just because the zoning looks right. Ask both offices, and keep a record of each answer.

Step 5: File the city application and expect an investigation

You file with the city or county that governs your site. Cities in the Twin Cities metro often handle licensing through a clerk or licensing department, but the process still varies by city. Minneapolis and St. Paul both license by category, and neither issues a general business license.

Initial on-sale applications receive a background and financial investigation. Plan for that step to take time, and respond quickly when the city asks for more documents. Incomplete applications are the most common cause of delay.

Fees differ by city. St. Paul's fee table as of 2026 is a useful example of how a large city prices its license types:

St. Paul license item (as of 2026)	Fee
Sunday on-sale	$200
2 a.m. closing	$59
On-sale liquor, 100 seats or less	$5,361
Off-sale	$1,500

These are St. Paul figures only. Your city's table will differ, and the figures can change. Ask the clerk for the current table in writing, and confirm whether any seating tier, Sunday option or late-hours fee applies to your plan before you budget.

Step 6: Clear the state retail alcohol permit and identification process

A city license does not finish the job. Minnesota adds a retail alcohol permit and identification process run through the Alcohol and Gambling Enforcement Division (AGED). Ask AGED for the current forms, the sequence of steps, and the timing before you schedule an opening date. Do not treat the city approval as your final green light until the state side is confirmed.

Step 7: Check the other licenses your activity needs

Because Minnesota licenses by trade and activity, a bar or liquor store may need additional permits. Use License Minnesota at mn.gov/elicense to browse licenses by topic, by agency or through the A to Z index. If you serve food, the required license depends on what you serve and how you prepare it, and it may come from the Minnesota Department of Health (MDH) or the Minnesota Department of Agriculture (MDA). If you hire employees, check the Department of Labor and Industry (DLI) requirements for your workforce. Confirm each requirement with the agency that issues it, because the state does not publish one combined list.

Step 8: Get advice from the Small Business Development Center

The Minnesota Small Business Development Center Network, administered by the Minnesota Department of Employment and Economic Development, offers business advising. A counselor can review your business plan, budget and timeline before you sign a lease. Start at mn.gov/deed/business/help/sbdc.

Expected results and timing

A complete, accurate application with the right entity, site and documents can help the process move with fewer repeat requests. Timing depends on the city's calendar, the investigation, any hearing requirement the city applies, and the state permit process. Plan for months rather than weeks, and do not sign a long lease or order equipment until the city and state approvals are in hand, or at least until you have written confirmation of the timeline. Approval is not guaranteed, and a city can deny an application that does not meet its requirements.

Common mistakes to avoid

• Assuming there is a statewide business license. There is not. Your license comes from the city or county, and the state adds its own permit process.
• Treating the entity filing as a license. The Secretary of State filing creates your entity. It does not authorize you to sell alcohol.
• Signing a lease before checking distance limits. A site near a school or state institution can block the license, and you may not recover the lease cost.
• Using a prohibited word in your name. An LLC name cannot contain "corporation" or "incorporated." Check the name against state records before you print signs.
• Skipping the newspaper publication for a DBA. A certificate that is not published can be invalid, which can cause problems with banks and vendors.
• Confusing the off-sale cap with the on-sale fee. The statutory cap applies to off-sale fees only. On-sale fees are set locally, so do not budget from the off-sale table for a bar.
• Forgetting the December 31 deadline. A missed Annual Renewal can terminate an LLC, and reinstatement costs money and time.
• Opening before the state permit clears. A city approval alone may not allow you to operate.
• Relying on an old fee table. Get the current figures from the clerk and the agency, and keep a dated copy.

Keep your license current

After you open, track every renewal date. Your city liquor license renews on the city's schedule, and your entity's Annual Renewal is due December 31. Your DBA renews each year at no charge. Put all of these dates on one calendar, and confirm the city renewal date and any fee with the clerk each year, because fee schedules change.

Reminder: this guide is informational, not legal or tax advice. Verify all fees, distances, and deadlines with the named agency or your city clerk, and consult a qualified Minnesota attorney and CPA before you form your business or sign any lease.