Do I need a bill of sale in my state?
A quick guide to obtaining a bill of sale in your state.
When do you need a bill of sale?
A bill of sale proves a legal transfer of ownership between a seller and a buyer. It essentially certifies a transaction, freeing the seller from liability and giving the buyer proof of ownership to obtain a title. The seller is responsible for creating the document.
The process might sound like a headache, and requirements vary by state. So you might wonder, “Do I need a bill of sale in my state?” Learn more about bill of sale requirements to create one if necessary.
Bill of sale rules by state.
Are you planning to sell your vehicle or a piece of property? Then, you may have asked yourself, “Do I need a bill of sale from my state?” The following states require a bill of sale to certify ownership:
- Alabama
- Arkansas
- Colorado
- Connecticut
- Hawaii
- Idaho
- Maine
- Nebraska
- New York
- Ohio
- Rhode Island
- South Dakota
- Vermont
- Washington
- West Virginia
- Wyoming
- Washington, D.C.
Common transactions that require a bill of sale.
A bill of sale is required as proof of purchase for more expensive items or other intangible assets. It can help signify the transfer of ownership, such as a motor vehicle. In many states, a bill of sale is required to accompany the transfer of the car’s title. So, do you need a bill of sale? Here are common transactions that require a bill of sale:
- Automobiles
- Aircraft
- Artwork
- Collectibles
- Equipment
- Furniture
- Livestock
- Motorcycles
- Real estate
- Watercraft
Conditions where a bill of sale is not required.
A bill of sale is not always required, particularly with lesser-value items. For example, an article of clothing does not require a bill of sale. However, it is the seller’s personal preference whether they would like a bill of sale.
In some states, a vehicle bill of sale is not always required. For example, California, Massachusetts, and Tennessee do not require a bill of sale for automobiles.
Also, some states will let you draft your own bill of sale. Some states may require a bill of sale from your state’s Department of Motor Vehicles. Be sure to double-check your state’s legal requirements.
Bill of sale benefits even if not required in your state.
Even if a bill of sale is not required in your state, using one is smart and beneficial.
A bill of sale provides evidence of the transfer of ownership in writing, which is important for both the buyer and the seller.
A bill of sale helps both parties review the terms and conditions to ensure their expectations are aligned. They can review the sale’s details, conditions, inclusions, and exclusions and help satisfy any potential disputes.
Finally, a bill of sale provides evidence of legal compliance. Many states and situations require a bill of sale, particularly for a vehicle. A bill of sale shows compliance with state and local regulations, which can help avoid potential fees or penalties. It’s also useful for tax purposes.
Bill of sale rules around who keeps the document.
Understanding the importance of a bill of sale in your state is crucial, as you might be wondering who keeps the bill of sale when the transaction is a done deal. The buyer and the seller should keep a copy of the bill of sale. A bill of sale is a legal document that can protect both parties involved as it clearly states the terms of the sale. Both parties should keep a copy to prevent any potential disputes or disagreements.
If you’re unsure of the bill of sale rules, signing the bill of sale is not always required. However, an unsigned bill of sale is a weaker legal document. Since a bill of sale is also a proof of contract, it’s better if the bill of sale is signed. Although most states do not require the document to be notarized, check the requirements on your state’s government website.
Bill of sale best practices.
Even if your state doesn’t require a bill of sale, you should still have one for your own records. If you’re the buyer, it helps track sale information, including the date of the sale, the price, and any features of the vehicle when you purchased it, such as the odometer reading. If you’re the seller, it certifies your transfer and relieves you of liability.
The good news is that creating a bill of sale doesn’t have to be a hurdle. If using a different document type, you can easily convert to PDF using Adobe Acrobat to put together a quick sales agreement. Explore what more can do with Acrobat to make your transactions simple and seamless.