The answer to the question, “Who keeps the bill of sale?” is that both the buyer and the seller should keep a signed copy for their records. If there is only one signed original, the buyer keeps it (it is needed for registration and proof of purchase) and the seller keeps a signed copy or scan.
This document proves that a sale took place and helps protect both sides if any issues come up later. Whether you are buying a used car or selling equipment, having a signed bill of sale on hand can save you a lot of trouble.
In this guide, we will explain why a bill of sale matters, who keeps the original and who keeps a copy, how long you should keep it, and which other documents to keep with it.
Key Takeaways
- A bill of sale proves that a transaction took place and protects both the buyer and seller; it complements a title but does not replace it; each serves a different legal purpose.
- If there is only one signed original, the buyer keeps it and the seller keeps a signed copy or scan. Ideally, sign two identical originals so each party has one.
- Both parties should keep a copy of the bill of sale for their records to protect themselves in case of any future disputes or prove the purchase, as well as for tax or registration purposes.
- Sellers should also notify the DMV of the sale (a release of liability or notice of transfer) where required, because a bill of sale alone may not end their responsibility for a vehicle.
- Retention time varies depending on the type of item, legal requirements, and potential future needs. As a rule of thumb, sellers of vehicles should keep it for at least five years.
What Is a Bill of Sale?
A bill of sale is a legal record that confirms a transfer of ownership between a seller and a buyer.
This document outlines what was sold, when, to whom, and for how much, and it can apply to almost any personal property transaction.
When it comes to the person who is responsible for the bill of sale, it’s typically the seller who provides the document since they are the ones transferring ownership. However, the buyer can also initiate it if the seller has not prepared one.
Bill of Sale vs. Title
When it comes to what a bill of sale vs. a title is, the two are not interchangeable, but they often go hand in hand. A title is a state-issued document that proves legal ownership and transfers it in the eyes of the government.
A bill of sale, on the other hand, acts as a supporting record of the transfer itself. In short, a bill of sale is your proof of purchase and transfer, while the title remains the proof of legal ownership.
Who Keeps the Bill of Sale: Buyer vs. Seller
If you’re wondering who keeps the bill of sale—the buyer or seller—when the transaction is complete, the answer is both. Here is how it works in practice, and why:
Situation | Who keeps what |
|---|---|
Two identical signed originals | Each party keeps one original. This is the best option. |
Only one signed original | The buyer keeps the original, since it is needed for registration and proof of purchase. The seller keeps a signed copy or clear scan, made before handing it over. |
Digital (PDF) bill of sale | Both parties save the fully signed PDF. Each keeps their own copy. |
The DMV needs a copy | Submit the copy or original as your state requires, and keep a copy for your records. |
Buyers
A bill of sale is important for buyers because it shows that they have acquired the item legally, and this is especially important when the item is of high value and has to be registered. Therefore, if there are ever questions about ownership, a bill of sale can serve as clear proof of the purchase, together with the title for items that have one.
It is also useful when buyers need to prepare for a resale or sort out their taxes; essentially, it is a record of purchase, which may be required in the future for various purposes. Buyers also typically need it to register or title a vehicle or boat and to calculate sales tax.
Sellers
Sellers need a copy of the bill of sale, too, because it includes the information about the time when the item was sold and confirms that they no longer possess the item. If it is damaged or misused later on, the bill of sale protects the seller from being held responsible.
For instance, with a vehicle, a signed and dated bill of sale helps the seller show when the buyer took over, which matters if tickets or claims arrive later. To be fully protected, sellers should also file a release of liability or notice of transfer with the DMV where required.
6 Things Every Legal Bill of Sale Should Include
A legal bill of sale should include the following six items:
- Names and contact details of both parties. Full legal names plus an address, phone number or email for the buyer and the seller.
- Description of the item. What was sold. For a vehicle, also add the vehicle identification number, registration number, and engine serial number.
- Purchase price. The total amount the parties agreed on.
- Payment method. Cash, check, or bank transfer, so there is a record of how the seller was paid.
- Date of the transaction. The day ownership changed hands.
- Signatures. Both parties should sign, even if your state does not strictly require both signatures, because two signatures make the record stronger.
Notarization is not required for most private sales, but a few states require it for certain transactions, usually vehicle sales. Nebraska, for example, commonly requires a notarized bill of sale for private vehicle sales, while Louisiana and West Virginia may require one in specific situations. Rules change. So, to make sure you don’t miss anything, always check the state-specific requirements.
Do Sellers Need to Notify the DMV After a Sale?
In many states, yes. A release of liability or notice of transfer tells the DMV that you no longer own the vehicle. Without it, you may still be contacted about the buyer’s parking tickets, tolls, or tax notices.
The name of the form, the deadline (often around 30 days), and whether it is required at all vary by state, so check your DMV’s website. File it promptly and keep the confirmation with your copy of the bill of sale.
When a Bill of Sale Is Legally Required vs. Recommended
A bill of sale is most often required, or needed in practice, for vehicle and boat transactions, because many states ask for it when you title or register the item. For most other items, the law does not require a specific form, but a written record is strongly recommended.
For example, the Uniform Commercial Code’s statute of frauds generally calls for a written agreement for sales of goods worth $500 or more, and a signed bill of sale serves that purpose. This applies to higher-value items such as collectibles, artwork, furniture, equipment, and livestock. Real estate works differently; it is transferred by a deed, and a bill of sale only covers personal property included in the sale (more on that below).
Some states (e.g., New York, Indiana, and Washington) provide a downloadable form through your state’s motor vehicle agency (the DMV or its equivalent), while others do not. If your state offers one, use it to ensure all the necessary information is included.
Lesser-value transactions (generally those under $500 that are not registered with the state) usually don’t need a bill of sale, so books or clothes can probably go without one. Still, creating it anyway is a good idea, as it helps prevent any confusion about ownership later on. Besides that, it can also show compliance with local laws and be useful for tax purposes.
How Long to Keep Your Bill of Sale
Besides knowing who keeps the bill of sale, you need to know how long to keep it. Unfortunately, there is no single answer, as this depends on the type of item sold and whether there are other legal considerations tied to it.
The table below summarizes the rules of thumb:
Item type | Buyer should keep it | Seller should keep it |
|---|---|---|
Vehicles, boats, and trailers | As long as you own it, then until the tax limitations period for the year you sell it ends (generally 3 years after filing) | At least 5 years (rule of thumb); a digital copy can be kept indefinitely |
Electronics, tools, and appliances | 1- 3 years, or until the warranty ends, whichever is longer | 1- 3 years |
Business equipment | Until the tax limitations period for the year you dispose of it ends, often longer than 3 years because of depreciation | Same period, to support the sale price you reported |
Personal property included with real estate | Indefinitely, alongside the deed | Indefinitely |
Vehicle and Watercraft Transactions
For vehicles like a motorbike, car, trailer, or boat, buyers should keep the bill of sale for as long as they own the item, and then until the tax limitations period for the year of the sale expires (generally three years after filing that return).
If you are the seller, at least 5 years is a good rule of thumb, as it covers the typical period for issues like unpaid fines or registration errors.
Because a scanned copy takes almost no space, sellers can also keep the bill of sale permanently to prove they are no longer the legal owner if any issues arise.
Personal Property and Equipment
You can keep the bill of sale for things like electronics, tools, and appliances for 1–3 years. Additionally, if you have a warranty for the item, don’t get rid of the bill of sale until that period passes.
For more expensive equipment, such as that used for business, a bill of sale will be helpful for tax and insurance purposes, so keep it until the tax limitations period for the year you dispose of the equipment expires. The IRS applies this rule to property records, and it is often longer than three years because of depreciation.
Real Estate and Land
In real estate transactions, ownership transfers by deed, and the bill of sale is only used to document the transfer of personal property that comes with the home, such as furniture. Therefore, it is best to save the bill of sale indefinitely, as it may come in handy if there are tax claims or legal disputes about what came with the property.
Final Thoughts
Knowing who keeps the bill of sale can be beneficial for both the buyer and seller, as each party should have a copy to stay protected when questions or issues come up later. Ideally, each party keeps a signed original; if there is only one, it goes to the buyer, and the seller keeps a signed copy or scan.
However, keep in mind that bill of sale rules vary by state and by item. Check your state’s DMV requirements or consult a qualified professional before relying on it.
Who Keeps the Bill of Sale FAQs
#1. Can a bill of sale be handwritten, or must it be typed?
Yes, a bill of sale can be handwritten. However, it still needs to contain all the necessary details and both parties’ signatures. It might also be the simpler option for many, but a typed version is usually seen as more professional.
#2. What happens if I lose my bill of sale?
If you lose your bill of sale, you should try to get a copy from the other party. For those related to vehicles, you can consult your local DMV to ask whether they hold a copy, for example if it was submitted when you registered the vehicle. If you cannot get a copy, you and the other party can sign a new bill of sale or a short statement confirming the original sale date and terms.
#3. Do I need to notarize my bill of sale?
You do not need to notarize your bill of sale unless your state or the type of transaction explicitly requires it. For instance, Nebraska commonly requires a notarized bill of sale for private vehicle sales, and Louisiana and West Virginia may require one in specific situations. Rules change, so confirm with your state’s DMV.
#4. Can I use a single bill of sale for multiple items?
Yes, you can use a single bill of sale for multiple items, but remember to be as specific as possible when listing each item, its price, description, etc., to avoid confusion.
#5. Who keeps the original bill of sale?
If there are two signed originals, each party keeps one. If there is only one, the buyer keeps the original, and the seller keeps a signed copy or scan made before handing it over.