What Is a Package Store Permit, and What Ownership and Operating Rules Are Unique to Texas Liquor Stores?

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A Package Store Permit (P) is the Texas permit that lets a retailer sell liquor in sealed, original containers for customers to take away and drink somewhere else. It carries ownership rules no other retail permit has: one person may hold an interest in no more than 250 package stores, may receive no more than 15 new package store permits in a calendar year, may not at the same time own a stake in a bar’s or restaurant’s alcohol permit, a brewery, or a beer distributor, and may not operate through a publicly traded company or any entity with more than 35 owners.

What the permit allows a store to sell

Section 22.01 of the Alcoholic Beverage Code lets a package store:

  • sell liquor and malt beverages at retail in unbroken original containers, for off-premises consumption only and not for resale;
  • sell wine in original containers of at least six ounces;
  • buy liquor in Texas from holders of winery, wholesaler’s, or class B wholesaler’s permits, and buy beer from general or branch distributors.

Nothing is opened or poured on the premises. The one variation is a package store located in a hotel, which may deliver unbroken packages to registered guests for consumption in their rooms.

How many stores one person can own

Older guidance, some of it still online, cites a five-store limit. That is no longer the law. Since September 1, 2019, Section 22.04 has provided that a person may not hold or have an interest, directly or indirectly, in more than 250 package stores or in their business or permits.

Two counting rules make the limit reach further than the number suggests:

  • a person has an interest in any permit in which his or her spouse has an interest; and
  • for a corporate permittee, the stockholders, managers, officers, agents, servants, and employees all count as having an interest in the corporation’s stores.

The same section adds a pace limit. TABC may not issue more than 15 original package store permits to one person in a calendar year. Buying an existing store is treated differently: under Section 22.041, a permit issued for a package store business that had operated in the same county for more than one year before the purchase does not count toward the 15-permit limit. Package stores that a hotel-operating corporation runs inside its own hotels fall outside Section 22.04 altogether.

The stakes a package store owner cannot hold

Section 22.06 separates the liquor store from most of the rest of the industry. A person who holds a package store permit, or owns an interest in a package store, may not have a direct or indirect interest in:

  • a brewer’s license, a retail dealer’s on-premise license, or a general or branch distributor’s license; or
  • a wine and malt beverage retailer’s permit, a wine and malt beverage retailer’s off-premise permit, or a mixed beverage permit;

or in the business of any of them, except as Section 102.05 allows. An owner who pictures a liquor store and a bar under the same ownership has to give up one of them before either application is filed, unless the hotel exception in Section 102.05 applies.

Who may not own one at all

Section 22.16 bars a public corporation from owning or holding a package store permit, whether directly, through an entity it owns or controls in whole or in part, or through an entity holding the permit for its benefit. “Public corporation” covers two cases:

  • an entity whose shares or other evidence of ownership are listed on a public stock exchange; and
  • any entity in which more than 35 persons hold an ownership interest.

The second test matters for fundraising. A store capitalized by a wide circle of small investors can cross the 35-owner line without ever touching a stock exchange. Before each renewal, an owner or officer must file a sworn affidavit that the permittee complies. Package stores located in hotels are excepted, and a small group of corporations that held permits and filed affidavits in 1995 is grandfathered.

Operating rules that stay with the permit

  • No move across county lines. Section 22.05 bars transferring a package store permit to another county. Relocating to a different county means a new permit.
  • Off-premises only. Serving drinks on site requires a different retail permit, and Section 22.06 bars a package store owner from holding one.
  • Notice by publication, not by sign. A package store applicant publishes newspaper notice of the application under Section 11.39, but Section 11.391(c) exempts package store applicants from the outdoor notice sign that on-premise applicants at new locations post.

Testing an ownership structure before applying

Before filing, list every person with an interest in the proposed store, counting spouses, stockholders, and officers. For each, count the package stores in which that person already holds an interest and the original permits issued to that person this calendar year. Confirm that no one on the list holds a stake in a bar, a beer-and-wine retailer, a brewery, or a distributor. Then count the owners of every entity in the ownership chain against the 35-person line.

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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