Idaho's Liquor Laws are archaic and are categorically unjust. The quota system is at the top of the list. Join us in signing this petition to repeal this decades old problem that creates regulatory capture, government imposed monopolies and kills small business entrepreneurship.

We have a comprehensive reform ready to present to our legislators in the Idaho Capitol but are not being heard. We ask that you also join in our voice to give this reform a fair hearing in front of the Senate State Affairs Committee.

Draft Proposal/Legislative Intent  Comprehensive Liquor License Reform Explained

The Problem(s): 

1.) Not enough liquor licenses.

This is the equivalent of a housing crisis. There is an extremely high demand for licenses and the quota system will not allow for any licenses to be issued. However, the state has allowed licenses to be sold, person to person, taking a 10% transfer fee, in order for business owners to “cut the line” and not have to wait for new licenses to be issued to them. This practice, coupled with the low supply and high demand of liquor licenses drives the prices up and puts small business owners at a disadvantage. They either have to come up with the money to cut the line ($350,000.00 - $400,000.00 in places like Boise where entrepreneurship is high and McCall, Coeur d'Alene or Ketchum where tourism flourishes) or wait the 15 - 20+ years on the list in order to receive a license. The quota system stifles small businesses and hurts Idaho’s economy. 

2.) Legacy License holders should be compensated for their investment in the system.

Compensation in the form of a cash payout from the government is infeasible and possibly illegal. This is a tall order and possibly the most difficult to achieve. This problem can be examined from a position of fairness. Legacy license holders have paid into a quota license system that was created in 1959 that unfortunately morphed liquor licenses from a simple permission slip from the state into a commodity. The payout path for legacy holders becomes even more complicated when trying to determine the value of each individual license, some were purchased for large sums of money while others were obtained by simply waiting in line and receiving one from the state. Determining the value and a fair and legal form of compensation is impossible and some may argue illegal.  

3.) The State of Idaho needs money for administration, education and enforcement. 

Currently this is funded by the General Fund which accounts for 42.4% of $115,600.00 net revenue from state liquor store sales (Fiscal Year 2022 according to NABCA https://www.nabca.org/sites/default/files/assets/files/ID_Apr2023.pdf and by the 10% transfer fee the state imposes on all person to person liquor license sales.

4.) Temperance - Idaho Code 23-901 states: “The restrictions, rules, and provisions contained in this act are enacted by the legislature for the protection, health, welfare and safety of the people of the state of Idaho and for the purpose of promoting and encouraging temperance in the use of alcoholic beverages within the state of Idaho.”(23-916, 23-913, 23-917,23-920,23-927,23-930, 23-931,23-933,23-937,52-101,) 

While it’s true that temperance is written into the Idaho State Constitution, the quota system is not. There has been temperance in Idaho code pre and post dating prohibition. The quota system was not put into effect until 1959, long after prohibition. Idaho is not homogenous and the laws, excluding the quota system recognize that. There are 2 dry counties in Idaho, Franklin and Madison and there are cities like Greenleaf and Middleton who choose not to serve liquor by the drink in their cities by vote, the latter just voted this year to go “wet” and serve liquor by the drink. There is temperance at a micro level of each municipality of Idaho and the knobs can be adjusted as those communities see fit. Idaho code 23-102 also states that. This act is passed in the exercise of the police power of the state. It is not designed to abridge the personal privilege of a responsible adult to consume alcoholic liquor as a beverage, except in cases of the abuse of that privilege to the detriment of others.

5.) Economic impact to our metropolitan, tourist and rural communities. The current system obstructs the free market and hinders small businesses.

Solutions:

1.)There are not enough liquor licenses in Idaho. We need to eliminate the quota system and make the market free and fair, making licenses available to all qualified applicants. 

2.) Instead of compensating legacy license holders with a cash payout, this bill seeks to create a more fair market where legacy license holders don’t feel at a disadvantage to new license holders who obtained their license in the post quota system. This sense of fairness comes in the form of a significantly higher annual license fee for all new license holders. The annual fee for all new licenses would be $5,000 annually and all legacy licenses would remain on the annual legacy fee structure at $750 per year in perpetuity. This allows for new entrants into the market while “compensating” legacy holders who may have paid a large sum for their license. Their license would still fall under the new rules of S1120 where they are not able to be leased but are allowed to be sold one time. Not only do legacy holders have a significantly lower annual operating cost, that savings will be transferred with the sale of that license which will help it retain some of its value.  

3.) With $5000.00 per year, per business going to the state's coffers, this will more than adequately make up for the lost revenue of state transfer fees on person to person sales. With more existing and established restaurants being able to add spirits as a service this will not only be revenue captured by the state in licensing fees but also through sales in the state’s liquor stores and again through sales tax. This will grow the budget for administration, education and enforcement.

4.) Temperance 

a.) With the cost of a license rising from $750.00 per year to $5000.00 this will help temper the business owners or potential business owners from making that investment every year. They will want to make sure their business is established and that they can make that investment every year. This price increase is meant to be for serious participants in the service industry who are willing to expend this amount each year. 

b.) Sunset the quota system over the next 10 years (Decrease the threshold by 150 less people per city, per year for 10 years). The sunsetting of the quota system over the next 10 years will also slow the progression of new entrants into the market, tempering the issuance of licenses for a measured growth in the service industry in all communities throughout the state.

5.) By removing the quota system and cutting the red tape it will allow for competition to return to our communities and entrepreneurs to participate in the arena of business. It will buck the status quo and let the cream rise to the top. This will allow all of Idaho's communities to flourish and the state to prosper.