On January 21, 2020, New Jersey Governor Phil Murphy signed 139 bills into law. Of those 139 bills that were signed, one bill, S1648, happens to concern the alcoholic beverage industry – specifically, plenary retail consumption licenses for nonprofit theaters.

New Jersey’s Alcoholic Beverage Law

Senate bill no. 1648 amends New Jersey’s Alcoholic Beverage Law, N.J.S.A. 33:1-19.7, which governs “Theater Licenses” (Type “37” licenses), making this license available to many more theater operators.

Theater licenses are unique because they are not included in the cap on the number of plenary retail liquor licenses (i.e., on-site consumption licenses) that may be issued within a municipality. Generally speaking, only one retail consumption license is allowed to be issued per 3,000 people in each municipality (there are a handful of other exceptions, such as “grandfathered” licenses and hotels).

Therefore, if your theater meets the qualifications to hold a Theater License, you do not have to find someone in your municipality willing to sell you an existing liquor license for an exorbitant price. Now, you can simply apply to your municipal body for a new Theater License.

Nonprofit Theater License Expansion

Until two days ago, only nonprofit theaters with at least 1,000 seats could obtain a Theater License. With the enactment of Senate bill no. 1648, nonprofit theaters (which are exempt from federal income tax under section 501(c)(3) under the Internal Revenue Code) that regularly conduct musical or theatrical performances or concerts and have 50 seats or more are now eligible.

Theaters with 1,000 seats or more will continue to be able to serve alcohol during the two hours immediately preceding the show, the show (including intermission), and the two hours immediately following the show. For those theaters that have seating capacities between 50 and 999 seats, the same rules regarding service apply, except that drinks may be sold during the two hours following a show no more than 15 times during a calendar year (so choose the performances when you will serve post-show beverages wisely).

The expansion of the Theater License provides a significant opportunity for local theaters to attract visitors and tap a new revenue stream. It is great to see that nonprofit theaters are being afforded an economical option to further their organization’s purpose of supporting the arts.