| Agency | Colorado Liquor Enforcement Division and, inside city limits, the Colorado Springs City Clerk |
|---|---|
| Form or step | State retail liquor application (DR 8404) filed as a transfer of ownership, with local forms and background checks |
| Timing | Start once a purchase agreement is signed; transfers commonly take a few months |
Watch for this: Every wholesaler that sold alcohol to you must confirm it was paid in full before the transfer is approved.
Two Levels of Approval
Colorado licenses alcohol at both the state and local level. The state Liquor Enforcement Division issues the state license.
Inside Colorado Springs, the Office of the City Clerk handles local licensing. In unincorporated El Paso County, the county clerk's office plays that role.
A sale needs approval from both. The buyer files a transfer of ownership application on the state retail application, the DR 8404, along with local forms.
What the Buyer Files
- The state application marked as a transfer of ownership
- Individual history forms and fingerprints for owners with roughly 10 percent or more of the buyer
- Proof of the right to occupy the premises, such as an assigned or new lease
- A wholesaler affidavit and tax check authorization, depending on the jurisdiction's checklist
- Local application forms and fees set by the City Clerk
Some local offices will not accept their application until the state application and fees have gone in, so the order matters. The City Clerk's office can confirm the current sequence.
The Seller's Part
Most of the work falls on the buyer, but the seller has jobs too. You sign the transfer paperwork, keep the license in good standing until closing and make sure every wholesaler bill is paid.
Colorado will not approve the transfer until each wholesaler that sold alcohol to you confirms it was paid in full.
Unresolved violations can also slow a transfer. If you have had citations, tell your broker early.
Keeping the Doors Open
State law allows a temporary permit so the buyer can keep selling alcohol while the transfer is pending.
The premises must already hold a valid license, and the buyer must have filed the transfer application with the local authority. How long the permit lasts and what it costs depend on local rules, so check with the City Clerk.
Without a temporary permit, closing day can mean days or weeks with no alcohol sales, which hurts the very cash flow the buyer paid for.
Building It Into the Deal
Most purchase agreements make license approval a closing condition, or close the business sale first and let the buyer operate under a temporary permit. Your attorney should address what happens if the transfer is denied.
Inventory is also handled with care. Alcohol inventory is usually counted on closing day and paid for separately from the business price.
Sale Tax Accounts Still Apply
A bar or restaurant also holds sales tax licenses with the city and state. See the Colorado Springs sales tax license page and the Colorado tax status letter page.
Sources and Next Steps
The Colorado Liquor Enforcement Division's transfer checklists, the Colorado Springs City Clerk's liquor rules and county clerk transfer guidance describe this process.
This is general information, not tax or legal advice, so confirm your situation with your attorney or CPA.
If your company serves alcohol and you want to know what it might bring, request a confidential valuation. Restaurant owners near the mountains may also find our page on Manitou Springs, CO business brokers useful.