State board outlines new liquor license fee structure for distributors

On April 1, 2025, the Washington Senate introduced Senate Bill 5786, a legislative proposal aimed at reforming the fee structure for spirits distributor licenses. The bill seeks to address revenue generation for the state’s liquor revolving fund while ensuring a fair and sustainable licensing process for spirits distributors.

The primary provisions of Senate Bill 5786 outline a tiered fee system for license issuance based on the revenue generated from spirits sales. For the first 27 months of licensure, distributors will pay a fee equivalent to 10 percent of their monthly sales revenue. This fee will decrease to 5 percent starting in the 28th month and continuing thereafter. The bill specifies that fees are applicable only to sales where the licensee was the first distributor to receive the spirits, whether from in-state distillers or authorized out-of-state suppliers.

Notably, the bill includes a provision for retail licensees selling spirits for resale, mandating that they also pay a distributor license fee on resales of spirits that have not previously incurred a fee. The Washington State Liquor and Cannabis Board is tasked with establishing rules for the frequency and timing of these payments, which are to be made quarterly.

The introduction of Senate Bill 5786 has sparked discussions among stakeholders in the spirits industry. Proponents argue that the new fee structure will provide a more equitable system that reflects the actual sales performance of distributors. However, some industry representatives have expressed concerns about the potential financial burden on smaller distributors, who may struggle with the percentage-based fees during their initial months of operation.

The economic implications of the bill are significant, as it aims to bolster the state’s liquor revenue while promoting responsible distribution practices. If passed, the bill could lead to increased funding for state programs supported by the liquor revolving fund, potentially impacting public health initiatives and regulatory enforcement.

As the legislative process unfolds, experts anticipate further debates regarding the balance between revenue generation and the sustainability of small businesses in the spirits sector. The outcome of Senate Bill 5786 will likely set a precedent for future licensing and fee structures in Washington's liquor industry.