A bill of sale is a legal document created by a seller and given to a purchaser to confirm a transaction and ensure all parties agree to the terms of the sale. A bill of sale validates a variety of ownership transfers, including vehicle transfers. You can use a bill of sale form provided by your local department of motor vehicle or choose to create your own. Although it may not seem necessary to complete formal documentation to give a gift, some states require a bill of sale for all vehicle ownership transfers.
Rules for Gifts
A bill of sale is not required in all states. Less than half the states require a bill of sale form in a vehicular transaction, according to CarsDirect.com. The bill of sale confirms a title transfer and serves as evidence of a contract. If a state requires a bill of sale, it must be completed even if the vehicle is a gift. The bill of sale may be required to register the vehicle and calculate sales tax owed by the recipient.
A bill of sale is a legal document created by a seller and given to a purchaser to confirm a transaction and ensure all parties agree to the terms of the sale. A bill of sale validates a variety of ownership transfers, including vehicle transfers. You can use a bill of sale form provided by your local department of motor vehicle or choose to create your own. Although it may not seem necessary to complete formal documentation to give a gift, some states require a bill of sale for all vehicle ownership transfers.
Necessary Information
The information required on a bill of sale varies depending on the state. Generally, you must include the year, make, model, vehicle identification number and odometer reading or odometer disclosure statement. You will need to complete the seller section. Write down your name and address and the date the change of ownership occurred. Even though you are gifting the vehicle, identify the recipient as the buyer. Some states allow you to write "gift" instead of a sale price.
A bill of sale is a legal document created by a seller and given to a purchaser to confirm a transaction and ensure all parties agree to the terms of the sale. A bill of sale validates a variety of ownership transfers, including vehicle transfers. You can use a bill of sale form provided by your local department of motor vehicle or choose to create your own. Although it may not seem necessary to complete formal documentation to give a gift, some states require a bill of sale for all vehicle ownership transfers.
Tax Exclusions
In some states, the gift is exempt from an excise tax if the vehicle is given to an immediate family member. For example, in Maryland, you can request an exemption if the parties involved in the gift transfer are either a spouse, child, parent, grandparent, grandchild, stepchild, stepparent, half-sibling, son-in-law, daughter-in-law, mother-in-law or father-in-law. If an aunt or uncle is giving the vehicle to a niece or nephew, the donor must be age 65 or older. In New Jersey, there are no relationship requirements to declare a vehicle a gift; however, the donor must complete a Seller’s Affidavit as verification.
A bill of sale is a legal document created by a seller and given to a purchaser to confirm a transaction and ensure all parties agree to the terms of the sale. A bill of sale validates a variety of ownership transfers, including vehicle transfers. You can use a bill of sale form provided by your local department of motor vehicle or choose to create your own. Although it may not seem necessary to complete formal documentation to give a gift, some states require a bill of sale for all vehicle ownership transfers.
State Requirements
You can refer to your local department of motor vehicles to determine if a bill of sale is necessary for your transaction. If you are giving a vehicle to someone in another state, you will also need to follow recipient's home state's document requirements. For instance, in Connecticut a bill of sale is required to register a vehicle, but is not needed in Florida. Since documentation requirements for registering a vehicle vary among states, it is always best to check state laws before completing the transfer.
References
- Nolo: What is a Bill of Sale?
- Cars Direct: States that Require a Bill of Sale for Buying/Selling Cars
- State of New Jersey Department of Treasury: Answers to Frequently Asked Questions
- State of Connecticut Department of Motor Vehicle: Frequently Asked Questions About Registration of Vehicles
- State of Connecticut Department of Motor Vehicle: Frequently Asked Questions About Registration of Vehicles
Writer Bio
Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.