Arizona Bars & Restaurants Can Delay License Payments, Continue Sales

By Patrick J. Paul and Adam E. Lang

As Arizona's tourism and hospitality industries continue to adapt to the pandemic fallout of COVID-19, Governor Doug Ducey extended additional relief yesterday, delaying renewal fees otherwise due today, April 1, 2020, for an additional 90 days: 90 Day Announcement. Typically, late payments on licensing fees would have restricted a licensee’s ability to sell alcoholic beverages and, in some instances, could have jeopardized the liquor license itself.

Over the past two weeks, Governor Ducey has issued three Executive Orders directly impacting the hospitality sector – from hotels to restaurants to bars.  On March 19, Governor Ducey issued Executive Order 2020–09, containing provisions dealing with the sale and service of spiritus liquor and further requiring the Arizona Department of Liquor License and Control (DLLC) to issue guidelines regarding continued compliance with Arizona’s liquor laws against the backdrop of this Executive Order.

Among other things, that Executive Order closed all bars, but it permitted the sale of alcohol subject to certain guidelines.  More particularly, the DLLC will consider the sale of spirituous liquor by non-restaurant retailers with off-sale privileges under A.R.S. § 4-209(B), using pick-up, delivery, or drive-thru options as a delivery of alcohol under A.R.S. § 4-203(J) and not in violation of the Executive Order.

Retail licensees that, as a result of the configuration of their licensed premises, cannot sell or deliver spirituous liquor for off-sale consumption without first removing the liquor from the licensed premises, will not be disciplined under A.R.S. § 4-207.01 for operating outside of the licensed premises, unless the DLLC determines that the licensee otherwise violated Title IV.  The DLLC guidelines direct licensees to use their best judgment to deliver spirituous liquor in a manner that is controlled, direct, and short in distance.  The DLLC considers curbside service the same as pick-up service.  

Restaurant licensees that use pick-up and curbside services that include alcohol must comply with A.R.S. § 4-244(10), which prohibits licensees from employing individuals under the age of eighteen to sell or disperse of spirituous liquors.  

Governor Ducey’s March 26 Executive Order 2020-17 permitted the DLLC to waive fees at its discretion, and his March 30 “Stay Home, Stay Healthy, Stay Connected” Executive Order made further provisions for the continued operations of restaurants for delivery and takeout that could include the delivery and takeout of alcoholic beverages. 

Effective Tuesday, March 31, 2020 at 5:00 p.m., the DLLC is closed to walk-in business, deferring much day-to-day tasks to an array of online resources. 

The DLLC Website provides: “In order to continue providing business services, this online tool is available to local customers and licensees to upload the required licensing documents.  Licensees and applicants are responsible to ensure all necessary documents, signatures are included with your submission.”  The website further acknowledges that "license renewal fees are deferred based."

Notwithstanding the renewal leniency, the  DLLC notes that all other fees are required.

This most recent lifeline to Arizona’s hospitality, restaurant, and bar industries is designed to soften the brunt caused by the COVID-19 pandemic, which has hit these business sectors particularly hard even as it continues to adapt to a delivery and take-out model to stem losses.