Alcohol Background Checks

Why Background Checks Matter

Alcohol is a highly regulated industry. Al Capone, George "Bugs" Moran, and other notorious bootlegging gangsters engaged in corruption, money laundering, profiting from illegitimate businesses (illegal gambling, prostitution, drugs), not paying taxes, and defiance of laws.

16-1-101, MCA states the purpose of Title 16:

  • This code is an exercise of the police power of the state for the protection of the welfare, health, peace, morals, and safety of the people of the state and of the state's power under the 21st Amendment to the United States Constitution to control the transportation and importation of alcoholic beverages into the state.
  • The overall purposes of this code under the 21st Amendment to the United States Constitution are to promote temperance, create orderly markets, and aid in the collection of taxes.

Our purpose and main goal is public safety.

Background Evaluations

Background evaluations are conducted to:

  • Keep criminal elements out of the industry
  • Preserve the ability to collect tax revenue
  • Provide transparency to regulators
  • Prevent cross-tier ownership
  • Ensure compliance with laws and rules

Alcoholic Beverage License Application

Learning from the history of Prohibition, background checks ensure that suitable people are engaged in alcoholic beverage businesses. Background checks must be thorough, detailed, and comprehensive to guarantee the individuals involved meet statutory requirements to ensure the safety of the citizens.

The following are required to review whether a person may be considered a good purveyor of alcoholic beverages and of good moral character. See 16-4-401, MCA.

Criminal checks protect:

  • Public health
  • Safety of patrons
  • Safety of nearby businesses

The public should not want unvetted individuals who may disregard the law, including alcohol laws, and attract violent behavior or disorder, i.e. shootings, stabbings, illegal drug activity, or using the business to conceal illicit activities.

Reviewing ownership in other businesses helps to:

  • Disclose the business structure
  • Reveal who is financially benefiting from the sale of alcohol
  • Reveal all owners, including any new owners
  • Confirm people are suitable to own an alcoholic beverage license
  • Prevent cross-tier ownership

Tax checks help to:

  • Confirm all owners are current on taxes
  • Confirm the business entity is current on all taxes
  • Provide details of a person's character and ability to operate a successful business involving alcohol
  • Ensure taxes are collected and paid — an important aspect of the alcohol industry, particularly in maintaining funding for governmental agencies responsible for licensing and enforcement of state and federal alcohol laws, as well as alcohol prevention and treatment programs

Reviewing finances helps to:

  • Ensure funding for the alcoholic beverage license is from a suitable source (non-institutional lenders are vetted)
  • Ensure funding for the business is from a suitable source
  • Provide transparent finances

Legal References

All licensees must comply with all Federal and Montana alcoholic beverage laws and rules. See 16-1-101 and 16-4-401, MCA.

Updated November 2023. Please note the information in department communications may have been modified, superseded, or made obsolete by changes in federal or state law or the Administrative Rules of Montana. To verify the current validity of any Department of Revenue communication, please contact us at DORCARDEducation@mt.gov.