A bill of sale is a legal document used for purchase and sale deals and title transfers. It proves that the purchase and sale operation occurred on a specific date in a particular location and helps to prevent disputes between the parties.
If you want to transfer ownership of the item to another person, you will need a well-prepared bill of sale to register the new title. The signed bill of sale may be required to apply for a title at your local department of motor vehicles (DMV) or probate office. This ownership transfer procedure is required in several US states but is recommended in all jurisdictions.
After you sign a proof of purchase, you may need to pay a sales tax if it applies to your purchase and sale deal. For example, when the subject of the bill of sale is a car, the buyer must pay sales tax based on the state or county where the deal occurs or where the new owner registers the car. A seller can include the tax in the car price or split the fees.
Although the bill of sale is useful for transferring ownership of property between two people, there are times when buyers and sellers can proceed with a transaction without a bill of sale. Below are some general examples of when a bill of sale is not required: