Arizona Revised Statutes
Title 4 - Alcoholic Beverages
§ 4-203.07 - Off-sale privileges; leases; mixed cocktails; permits; fees

4-203.07. Off-sale privileges; leases; mixed cocktails; permits; fees
A. Notwithstanding section 4-203, subsection E and section 4-210, subsection A, paragraph 6, a bar, beer and wine bar and liquor store licensee may lease the off-sale privileges associated with the licensee's license, except the privilege to sell mixed cocktails for off-premises consumption pursuant to section 4-244, paragraph 32, subdivision (d), to a restaurant licensee. The lease shall be for a period of one year and may be renewable for successive terms of one year. The off-sale privileges of a bar, beer and wine bar or liquor store license that are held in nonuse status may also be leased pursuant to this section.
B. Leases made pursuant to this section are subject to the following conditions:
1. The department shall establish a minimum of four lease windows throughout the calendar year during which a lease may be agreed to between a bar, beer and wine bar or liquor store licensee and a restaurant licensee for the lease of off-sale privileges.
2. A restaurant licensee may apply to the department for approval of a lease at least thirty days before the end of the lease window. The restaurant licensee shall provide a completed lease agreement signed by both the lessor and lessee. The department may establish and charge an application fee for administrative and enforcement costs associated with this section.
3. On the director approving the lease, the director shall transfer the lessor's off-sale privileges, except the privilege to sell mixed cocktails for off-premises consumption pursuant to section 4-244, paragraph 32, subdivision (d), to the restaurant lessee for the term of the lease.
4. The department shall establish a process to facilitate and approve the lease conveyance and to govern the leases, including the following:
(a) A standard form of lease.
(b) The term of the lease shall be one year except for the first year of the lease. During the first year of the lease, the director may establish a lease term that is less than a year in order to align the lease renewal date with the renewal date of the restaurant license.
(c) The responsibilities of the lessor and lessee.
(d) The lease may be transferred to another restaurant licensee if the new restaurant licensee purchases the business of the original lessee during the term of the lease.
(e) The privileges conveyed to the lessee during the term of the lease will continue if the bar, beer and wine bar or liquor store lessor has its license suspended or revoked.
(f) If the bar, beer and wine bar or liquor store lessor sells its license during the term of the lease, the purchaser of the bar, beer and wine bar or liquor store license becomes the new lessor.
(g) This title and rules adopted pursuant to this title apply to both the lessor and lessee.
(h) During the term of the lease, all violations and liability for liquor service under the lease shall be attributed only to the restaurant licensee leasing the privilege. The restaurant licensee leasing the off-sale privilege is not responsible for violations committed by the lessor.
5. The restaurant licensee shall pay to the department all lease payments in full in advance.
6. The department of liquor licenses and control may adopt a procedure to pay the lease amount to the lessor and may use the department of administration to facilitate the payments.
7. During the term of the lease, all violations and liability for the liquor service under the lease shall be attributed only to the restaurant licensee leasing the privilege. Pursuant to section 4-210, the director may immediately suspend a lease for any violation of this title or any rule adopted pursuant to this title by the restaurant licensee. The restaurant licensee leasing the off-sale privilege is not responsible for violations committed by the lessor.
8. During the term of the lease, a bar, beer and wine bar or liquor store lessor may not sell spirituous liquor for off-premises consumption, except a bar or liquor store licensee may sell mixed cocktails for off-premises consumption pursuant to section 4-244, paragraph 32, subdivision (d).
9. The restaurant licensee leasing the off-sale privilege is subject to the limit on off-sale use by the restaurant licensee's total spirituous liquor sales as prescribed in section 4-206.01, subsection G.
10. A lessor may lease its off-sale privileges only to a restaurant licensee located in the same county.
C. The director shall publish a lease amount for leases made pursuant to this section. The department shall establish a lease amount that fairly recognizes, and is derived from, the commercial value of selling spirituous liquor for consumption off the licensed premises. The department may establish separate lease amounts for urban and rural counties and may designate counties in this state for each amount. The lease amount applies unless the lessor and lessee agree to a different lease amount.
D. Beginning January 1, 2026, the director shall make available for restaurant licensees to purchase from the department permits to sell mixed cocktails pursuant to section 4-244, paragraph 32, subdivision (d) equal in number to the number of total bar and liquor store licenses. The director may set the application and annual renewal fee for a mixed cocktail permit to be used for administrative and enforcement costs associated with the permit.

Structure Arizona Revised Statutes

Arizona Revised Statutes

Title 4 - Alcoholic Beverages

§ 4-101 - Definitions

§ 4-111 - State liquor board; department of liquor licenses and control; members; director; appointment and removal

§ 4-112 - Powers and duties of board and director of department of liquor licenses and control; investigations; county and municipal regulation; definition

§ 4-113 - Enforcement officer; credentials; peace officer status

§ 4-114 - Interest in business prohibited; forfeiture of office

§ 4-115 - Disposition of fees and penalties

§ 4-116 - Receipts from club licenses and applications

§ 4-116.01 - Receipts from sampling privilege and growler permits

§ 4-118 - Inspection of premises

§ 4-119 - Records

§ 4-120 - Liquor licenses fund; exemption

§ 4-201 - Licensing; application procedure in city, town or county; burden of proof

§ 4-201.01 - Extending time limits

§ 4-202 - Qualifications of licensees; application; background information; prior convictions

§ 4-203 - Licenses; issuance; transfer; reversion to state

§ 4-203.01 - Interim permit; fee; rules

§ 4-203.02 - Special event license; rules

§ 4-203.03 - Farm winery festival license; farm winery fair license; fee

§ 4-203.04 - Direct shipment license; issuance; fee; requirements; renewal; civil penalties; limitations; duties; violation; classification; applicability

§ 4-203.05 - Licenses held in nonuse status

§ 4-203.06 - Mixed cocktails; off-sale privileges; leases; fees

§ 4-203.07 - Off-sale privileges; leases; mixed cocktails; permits; fees

§ 4-204 - Personal representative or fiduciary acting for licensee

§ 4-205 - Issuance of club license; regulatory provisions; revocation

§ 4-205.01 - Hotel-motel license; issuance; revocation

§ 4-205.02 - Restaurant license; issuance; regulatory provisions; expiration; off-sale leases and permits; fee; definitions

§ 4-205.03 - Government license; issuance; regulatory provisions; agreements with coliseum concessionaires; definitions

§ 4-205.04 - Farm winery license; issuance; regulatory provisions; retail site; fee

§ 4-205.05 - Disposal of seized or recovered liquor

§ 4-205.06 - Hotel or motel minibars; rules; definitions

§ 4-205.07 - Conveyance license for excursion boats

§ 4-205.08 - Microbrewery license; issuance; regulatory provisions; retail site

§ 4-205.09 - Microbrewery and farm winery licenses on same land; requirements

§ 4-205.10 - Craft distiller license; issuance; regulatory provisions; fee

§ 4-205.11 - Craft distillery festival license; craft distillery fair license; craft distillery fee

§ 4-205.12 - Tasting rooms with shared patios

§ 4-205.13 - Registered alcohol delivery contractor; issuance; fee; regulatory provisions

§ 4-206.01 - Bar, beer and wine bar or liquor store licenses; number permitted; fee; sampling privileges; off-sale permit

§ 4-207 - Restrictions on licensing premises near school buildings; definition

§ 4-207.01 - Submission of floor plan required; alteration of licensed premises; ingress and egress to off-sale package sales in on-sale licensed premises

§ 4-207.02 - Multiple licensees with joint premises

§ 4-207.03 - Extended premises; application; requirements; fee

§ 4-208 - Rejection as to location

§ 4-209 - Fees for license, application, issuance, renewal and transfer; late renewal penalty; seasonal operation; surcharges

§ 4-210 - Grounds for revocation, suspension and refusal to renew; notice; complaints; hearings; defense

§ 4-210.01 - Authority to impose civil penalty; training

§ 4-210.02 - Appeals from director

§ 4-211 - Judicial review; bond

§ 4-212 - Injunctions

§ 4-213 - Restaurant audit

§ 4-214 - Arizona wines; labeling

§ 4-215 - Regional shopping centers; commercial offices and retail centers; extension of premises; application; approval; fee; definition

§ 4-221 - Registration of stills; forfeiture; sale; proceeds

§ 4-222 - Registration of retail agents; fees

§ 4-223 - Authority of cities and towns to tax transactions involving spirituous liquors; prohibitions

§ 4-224 - Local ordinances; prohibitions

§ 4-225 - Food safety; federal law; preemption

§ 4-226 - Exemptions

§ 4-227 - Qualified retail cooperatives; pricing; definitions

§ 4-227.01 - Channel pricing; definition

§ 4-228 - Front entrance lock prohibited; exception

§ 4-229 - Licenses; handguns; posting of notice

§ 4-241 - Selling or giving liquor to underage person; illegally obtaining liquor by underage person; violation; classification; definitions

§ 4-242 - Sale of liquor on credit prohibited; exceptions

§ 4-242.01 - Prohibition of automatic teller machine or point-of-sale terminal that accepts electronic benefit transfer cards on premises

§ 4-243 - Commercial coercion or bribery unlawful; exceptions

§ 4-243.01 - Purchasing from other than primary source of supply unlawful; definitions

§ 4-243.02 - Sale of beer, wine or distilled spirits by producer; limitations

§ 4-243.03 - Alternating proprietorships

§ 4-243.04 - On-sale retail licensees; ownership interests; conditions

§ 4-244 - Unlawful acts; definition

§ 4-244.02 - Unlawful importation of spirituous liquor; exceptions

§ 4-244.04 - Farm winery sampling

§ 4-244.05 - Unlicensed business establishment or premises; unlawful consumption of spirituous liquor; civil penalty; seizure and forfeiture of property

§ 4-246 - Violation; classification; fine; civil penalty

§ 4-247 - Peace officers

§ 4-248 - Reporting by court of convictions; definition

§ 4-249 - Consumption of liquor by underage person in religious service allowed

§ 4-250 - Distilled spirits pricing; prohibition

§ 4-250.01 - Out-of-state person engaged in business as producer, exporter, importer, rectifier, retailer or wholesaler; violation; cease and desist order; civil penalty

§ 4-251 - Spirituous liquor in motor vehicles; prohibitions; violation; classification; exceptions; definitions

§ 4-261 - Warning signs; consumption of spirituous liquor during pregnancy; composition of signs; rules; inspection of premises; penalty

§ 4-262 - Display of license

§ 4-301 - Liability limitation; social host

§ 4-302 - Notice of litigation

§ 4-311 - Liability for serving intoxicated person or minor; definition

§ 4-312 - Liability limitation