What is a Late Hours Permit (LH) and how does it extend alcohol service toward 2:00 AM?

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Serving until 2 a.m. takes an add-on to the main permit: the retailer late hours certificate, which TABC abbreviates LH. With it, a bar, club, or restaurant keeps selling the drinks its main permit already allows for up to two more hours after midnight. It works only at an address where the later hours are legal: a large city or county the Code treats as an extended hours area, or a place whose city council or commissioners court has adopted extended hours.

What the certificate adds

The current version of Chapter 29 of the Alcoholic Beverage Code, which governs the retailer late hours certificate, took effect on September 1, 2021. Under Section 29.02, a certificate holder may sell or serve the alcoholic beverages its primary permit or license covers:

  • on Sunday, between 1 a.m. and 2 a.m.; and
  • on every other day, between midnight and 2 a.m.

The certificate adds time, not products. A mixed beverage permittee keeps serving what its mixed beverage permit covers, and a beer licensee keeps serving beer. It cannot stand alone, and it expires on the same date as the primary permit or license it depends on. “Late hours permit” is an informal name for the same authorization; the Code’s term is certificate.

Who can hold it

Section 29.01 allows the certificate to be issued to the holder of:

  • a Mixed Beverage Permit (MB);
  • a Private Club Registration Permit (N); or
  • a Retail Dealer’s On-Premise License (BE).

TABC’s license and permit types page lists a longer group of eligible holders: it adds the Wine and Malt Beverage Retailer’s Permit (BG) and the private club variants NB and NE. The statute’s list and the agency’s list differ on the BG, so a BG holder planning to stay open past midnight should get TABC’s answer for its own permit before building the schedule around it.

The certificate works only where the Code authorizes sales in those hours. Two sections of Chapter 105 of the Alcoholic Beverage Code set the map: Section 105.03 for mixed beverages and Section 105.05 for beer sold under a BE. Each creates two routes.

  1. Population. In a city or county with a population of 800,000 or more under the last preceding federal census, or 500,000 or more under the 2000 census, a certificate holder may sell from midnight to 2 a.m. without any local vote.
  2. Local adoption. Everywhere else, the extended hours apply only if the local government adopts them: by order of the commissioners court for the unincorporated part of a county, or by ordinance of the governing body of an incorporated city or town.

The two sections differ in one detail. Section 105.05(d) lets a city or county adopt the extended hours “or any part of the extended hours” for beer sold under a BE. Section 105.03(d), which covers mixed beverages, contains no “any part” language. A violation of a local ordinance or order adopted under either section is a violation of the Alcoholic Beverage Code.

Because the population test is tied to the most recent federal census, the set of qualifying cities and counties can change after a census. TABC’s current Required Certifications form also words the 500,000 test by reference to the 2020 census rather than the 2000 census named in the statute, which is one more reason to rely on the local certification for the specific address. The city secretary or county clerk can say whether extended hours apply at a specific address and, if they were adopted locally, which ordinance or order adopted them and how many of the hours it covers.

The consumption cutoff that follows 2 a.m.

Stopping sales at 2 a.m. does not end the obligation. Section 105.06 treats licensed premises as a public place, and in an extended hours area it is an offense to consume an alcoholic beverage there, or to possess one with intent to consume it:

  • on Sunday, between 2:15 a.m. and noon; and
  • on any other day, between 2:15 a.m. and 7 a.m.

That leaves fifteen minutes after last sale for drinks already served. The offense is a Class C misdemeanor, and the statute carves out one exception: a registered hotel guest may drink in the hotel bar at any time. Areas without extended hours have an earlier consumption cutoff.

Checking the plan before promising a 2 a.m. close

  • Permit type. Confirm the primary permit is on the Section 29.01 list, or, for a BG, that TABC will issue the certificate on it.
  • Address. Confirm the location is in an extended hours area, by population or by a local order or ordinance, and keep a copy of the order or ordinance.
  • Scope of local adoption. For beer sold under a BE, confirm whether the local government adopted the full midnight to 2 a.m. window or only part of it.
  • Floor procedure. Set last call so that sales stop by 2 a.m. and glasses are cleared by 2:15 a.m.

This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.

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