Licensing a Brewery, Winery or Distillery in Washington: The Federal Track and the State Track

Why two applications and not one?

The two regimes are not alternatives, and neither follows the other. Each bars you from operating before its own approval issues. For spirits, "A person may not operate a distilled spirits plant unless a notice of registration has been approved by TTB." 27 CFR 19.80. The brewery and winery provisions read the same way. 27 CFR 25.61(a); 27 CFR 24.105.

The state license is a separate approval, from a separate agency, under a separate chapter, issued in the name of the applicant. RCW 66.24.010(1). The answer to which one you need is both. The question worth paying for is the order.

Which federal filing do you make, and how many?

The number of federal approvals differs by product, and that is the most useful thing on this page.

A brewery: one

The Brewer's Notice, on TTB F 5130.10, executed under penalties of perjury, and the brewery may not commence business until TTB approves it. 27 CFR 25.61(a); 27 CFR 25.63. It carries the form of business organization and the persons interested in it, a description of the brewery, trade names, the owner and any mortgagee of the land or buildings, and whether a bond is required. 27 CFR 25.62(a).

A winery: two

The application goes on TTB F 5120.25, also under penalties of perjury. 27 CFR 24.105. Then comes a second approval that applicants routinely collapse into the first: a basic permit under the Federal Alcohol Administration Act is required to produce wine, and operations needing one may not begin until it is approved. 27 CFR 1.21; 27 CFR 24.106. A bonded wine cellar used only to store untaxpaid wine is the exception. 27 CFR 24.106.

A distillery: three

Registration of the plant on TTB F 5110.41, without which the plant may not operate. 27 CFR 19.72(b)(1); 27 CFR 19.80. An operating permit, which 27 CFR 19.91 requires for operations not required to be covered by a basic permit. And a basic permit, because a person engaged in the business of distilling distilled spirits needs one. 27 CFR 1.21.

Why the count differs

Each operative section of 27 CFR part 1, subpart C, is built on the same lead-in: "No person, except pursuant to a basic permit issued under the Act, shall:". Section 1.21 then reaches the business of "distilling distilled spirits, producing wine, rectifying or blending distilled spirits or wine," along with bottling, or warehousing and bottling, distilled spirits. Brewing is not on that list. Malt beverages appear in part 1 only at 27 CFR 1.20, importing, and 27 CFR 1.22, purchasing for resale at wholesale, so a brewer is not among the domestic producers the subpart names.

So a distiller faces an approval nobody mentions, under a statute separate from the one the registration sits under.

Which Washington license, and what does it ask?

The license sections run by product and size. A domestic brewery at 60,000 barrels of malt liquor a year or more is RCW 66.24.240, at $2,100; a microbrewery under that figure is RCW 66.24.244, at $150. A domestic winery is RCW 66.24.170, with the fee computed only on liters manufactured. A distiller is RCW 66.24.140, with craft distillery privileges at RCW 66.24.145. One fee line shows how tightly the tracks are wired together: stills already licensed as fruit or wine distilleries by the federal government are licensed by the Board at $300 a year. RCW 66.24.140(1)(d).

On the application, the Board may inspect the premises, inquire into all matters connected with their construction and operation, consider prior criminal conduct and violation history, and require fingerprinting. RCW 66.24.010(2).

The same subsection carries four further restrictions, written as limits on retail licenses rather than manufacturer licenses, under a sentence reading "No retail license of any kind may be issued to." They cover a sole proprietor without a month's residency in the state, a copartnership whose members are not all qualified, a business conducted by a manager or agent lacking the licensee's qualifications, and a corporation or LLC neither created under Washington law nor holding a certificate of authority here. RCW 66.24.010(2)(a) through (d). That reaches most producers anyway, because a brewery or winery pouring on site holds retail licenses too.

One provision is worth knowing before you sign anything. An applicant qualified in every way except for an executed lease or purchase agreement gets conditional approval, and once the lease or purchase is executed the Board must immediately grant final approval. RCW 66.24.010(5)(b).

Who counts as an owner?

This is the part that catches investors, and the state's idea of an owner is wider than the cap table. A liquor license must be issued in the name or names of the true parties of interest. WAC 314-07-035, citing RCW 66.24.010(1).

Who that takes in depends on the entity. In an LLC, all members over 10 percent and their spouses, plus all managers and their spouses at any percentage. In a privately held corporation, all officers and spouses, plus stockholders over 10 percent of the issued or outstanding stock and their spouses. WAC 314-07-035(1).

Then the clause that is not about ownership at all. For any entity, a true party of interest includes anyone in receipt of, or with the right to receive, more than 10 percent of the gross or net sales of the licensed business during any full or partial calendar or fiscal year. WAC 314-07-035(1). A revenue share negotiated by people who were careful not to give away equity can put its holder on the license. The exclusions carry a common condition: a lessor taking reasonable rent under a bona fide lease, a party contracting to sell the property, and a franchisor taking franchise fees are each excluded unless that person exercises control over or participates in management. WAC 314-07-035(2).

One provision reaches past the documents. Where an entity other than the owner runs day-to-day operations under an agreement, that operating party becomes a true party of interest, must meet all the qualifications, and if approved must be the licensee. WAC 314-07-035(4).

The federal side asks a narrower version of the same question. A Brewer's Notice requires officer and director lists and statements of interest, and persons holding 10 percent or more must be identified. 27 CFR 25.66; 27 CFR 24.110; 27 CFR 19.93.

Where can the building be, and what can you do in it?

The Board may not license previously unlicensed premises for on-premises or off-premises consumption within five hundred feet of a tax-supported public elementary or secondary school, measured along the most direct public route between entrances, where the school objects in writing within twenty days of the Board's notice. RCW 66.24.010(9)(a). If your plan has a tasting room in it, that is a question for before the lease. The federal filings attach to a described physical space as well, down to each tract of land and each building. 27 CFR 25.68; 27 CFR 24.111; 27 CFR 19.74.

Each manufacturer license also carries its own retail privileges, and those retail licenses are separate licenses. A domestic brewery may distribute and retail beer of its own production, may sell another brewery's beer within 25 percent of its on-tap offering of its own, and may hold up to four retail licenses for a tavern or restaurant. RCW 66.24.240(2) through (4); RCW 66.24.244(2) through (5). A domestic winery may retail and distribute its own production and may sell and sample at up to four additional Board-approved locations. RCW 66.24.170(3), (4)(a). Both brewery sections were amended twice in 2025, so if you are reading an older printout, check it against the current text.

Do you need a bond?

All three types share one architecture. A bond is required, there is an exemption for small producers who pay tax on a deferred basis, that exemption reaches only nonindustrial or beverage use, and there is no exemption at all for industrial use. 27 CFR 25.91(e); 27 CFR 24.146(d); 27 CFR 19.151(d). Mixed operations count as industrial unless the product is designated solely nonindustrial when produced or received and is not later mixed. 27 CFR 24.146(d)(2); 27 CFR 19.151(d)(2).

A brewery

The bond goes in on Form 5130.22 with the original Brewer's Notice, and a continuing brewer files a new bond or a continuation certificate once every four years. 27 CFR 25.91(a), (b). A brewer paying tax on a deferred basis is excused during any part of a calendar year in which it is eligible for an annual or quarterly return period. 27 CFR 25.91(e).

Those return periods are defined at 27 CFR 25.164(c), in an order worth noting: the annual period is (c)(2) and the quarterly is (c)(3). The annual period needs a reasonable expectation of not more than $1,000 in beer tax for the current calendar year and not more than $1,000 owed for the preceding one. The quarterly period needs that you were not liable for more than $50,000 in the preceding year and reasonably expect not more than $50,000 in the current one. Eligibility ends on the first date the year's aggregate tax passes the figure. 27 CFR 25.164(c)(2), (c)(3).

The thresholds are beer excise tax liability, not revenue, so a brewery with well over $50,000 in sales can still sit inside the quarterly period. And reasonably expecting is defined rather than left to optimism: there must be no existing or anticipated circumstance known to you, an increase in production capacity among them, that would carry liability over the limit. 27 CFR 25.164(c)(4)(ii).

A winery

The proprietor gives bond on TTB F 5120.36 to cover liability for excise taxes, and wine removed after tax determination but before payment requires a tax deferral bond as well. 27 CFR 24.146(a), (b). Operations coverage runs from a $1,000 minimum to a $50,000 maximum, and $100,000 where the liability exceeds $250,000; tax deferral coverage runs from $500 to $250,000. 27 CFR 24.148. The exemption turns on eligibility for an annual or quarterly return period under 27 CFR 24.271, and an existing exempt proprietor must furnish a bond once the year's aggregate tax passes the threshold in the rule. 27 CFR 24.146(d)(1); 27 CFR 24.154(b).

A distillery

Bonds go in on TTB F 5110.56, the types and penal sums depending on the size and kind of operations, and TTB will not approve a registration until the applicant has provided them. 27 CFR 19.151(a). The bond obligates compliance with the law and the regulations and payment of all taxes imposed by 26 U.S.C. chapter 51, with penalties and fines. 27 CFR 19.151(b). Its exemption turns on eligibility for an annual or quarterly return period under 27 CFR 19.235. 27 CFR 19.151(d)(1).

Sections 24.271 and 19.235 set their own figures, and the brewery numbers above do not carry across to them.

What happens when something changes?

The thirty-day habit

This is the part nobody plans for, and it matters most once you already hold both approvals. The federal rules run on amended filings, and the recurring deadline is thirty days: a change generally, officers and directors, and a change in control or management, even though the stockholder list itself goes in annually. 27 CFR 25.71; 27 CFR 25.74; 27 CFR 25.75. A change in location takes an amended notice plus a new bond or consent of surety, and an extension of the premises takes an amended notice, with the added facilities unusable until approved. 27 CFR 25.77; 27 CFR 25.78. The wine side runs the same way. 27 CFR 24.120; 27 CFR 24.123; 27 CFR 24.124.

Two of the wine rules are not deadlines at all, and the difference is the whole point. Operations under a new name may not be conducted, and operations may not be commenced at a new location, before the amended application is approved. 27 CFR 24.122; 27 CFR 24.129. Some of these filings you satisfy by filing. Others you have to wait on. Treating the second kind as the first is how a winery ends up trading under a name that was never approved.

Selling, or taking on a partner

A change in proprietorship is not an assignment of anything. The outgoing brewer files the notice of permanent discontinuance, and the successor qualifies as the proprietor of a new brewery, filing a new notice and bond in his or her own name. 27 CFR 25.72(a); 27 CFR 25.85. A wine successor must, before commencing operations, apply for and obtain any required permits. 27 CFR 24.125(a). Nothing in either regime is inherited, and the buyer of a producing business is an applicant rather than an assignee.

Partnerships are the trap inside the trap. Adding or withdrawing a partner is itself a change in proprietorship, and a partner's death, bankruptcy or insolvency dissolves the partnership unless the surviving partners meet the conditions in the rule. 27 CFR 25.73. A surviving wine partner may continue on a consent of surety. 27 CFR 24.128.

Which one do you file first?

What matters for planning is where each side's hard stops sit, and the bonds are most of them. A brewer may not begin or continue before the bond is approved, no wine operation may commence or continue until the bonds and consents of surety are approved, and TTB will not approve a distillery's registration until its bonds are in. 27 CFR 25.91(d); 27 CFR 24.145; 27 CFR 19.151(a).

The state has a mechanism for the gap applicants worry about most. Conditional approval exists for the applicant who is qualified except for an executed lease. RCW 66.24.010(5)(b). The instinct is to sign the lease first so there is an address for the form. The statute contemplates the application going in before the lease does.

That should drive the calendar. Both governments attach approval to a described premises, and both require a filing when the description changes, so the building decision sits upstream of both applications. In most openings it is made first, for reasons that have nothing to do with either of them: the space is available and the landlord has another prospect. Then the licensing questions get asked about a building that is already costing rent.

Where this goes wrong

An investor comes in on a revenue share instead of equity and everybody checks the cap table. More than 10 percent of gross or net sales makes the recipient a true party of interest whether or not they own anything. WAC 314-07-035(1).

A management agreement is signed for operational convenience. The operating party becomes a true party of interest and, if approved, must be the licensee. WAC 314-07-035(4).

A partner is added or bought out with a document that assigns an interest. Federally that is a change in proprietorship, and the successor qualifies as new. 27 CFR 25.73; 27 CFR 24.125.

A distillery budgets for registration and the operating permit and hears about the basic permit later. Distilling needs one and brewing does not, which is why advice from a brewer does not transfer. 27 CFR 1.21.

A brewery grows past the return-period threshold mid-year and nobody connects that to the bond it was exempt from. Eligibility ends the first date the year's aggregate tax passes the figure. 27 CFR 25.164(c).

What a lawyer does here

Most of the value is spent before anything is filed. Working out whether your operation faces one federal approval, two or three. Reading the ownership and the financing against the true party of interest rule before the Board does, which means reading the operating agreement, the investor documents and the lease as one problem. Sequencing the applications against the lease, the build-out and the equipment delivery. And putting the amendment obligations somewhere they will still be found in four years, because they outlast the people who remember the opening.

I handle Washington alcohol beverage licensing and Liquor and Cannabis Board work from my office in downtown Spokane, for breweries, wineries and distilleries, along with the entity and lease questions that come with them. I am admitted in Washington, WSBA #55307, and in Oregon, OSB #242384, which matters in the Columbia corridor, where producers do business on both sides of the river. I represent clients throughout Washington.

If you are opening, or already mid-application

If you are planning a brewery, winery or distillery, mid-application on either side, bringing in an investor, buying out a partner, moving, expanding the premises, or buying a producer that already holds both approvals, my office offers a free initial consultation by appointment in downtown Spokane, at 601 W. 1st Ave., Suite 1400. Bring whatever has been filed so far, the lease or purchase agreement, and the ownership documents.

Disclaimer

This article is general information about Washington and federal law, not legal advice, and reading it does not create an attorney-client relationship. Law changes, and how it applies depends on facts specific to your situation. If you have a question about your own circumstances, speak with a lawyer.