The Colorado bill of sale is a legally binding document drafted to document the ownership transfer and purchase of personal property. It is often a required document for registering a motor vehicle.
Some governmental bodies will provide a bill of sale form, while in some cases, it is up to the seller and the buyer to draft their own bill of sale. The bill of sale must have the following elements:
Mandatory Information
Information about the buyer and the seller
Details about the purchased item
Purchase price
Date and place of the bill of sale signature
Signatures of the seller and the buyer
The bill of sale form is often very flexible, and the parties are free to enter any additional information and disclosure if they feel it is necessary. Bear in mind that the structure of the bill of sale will largely depend on the type of item being transferred.
Colorado Bill of Sale Parties
The main parties to the bill of sale are the seller and the buyer. In special cases, the bill of sale can also be signed by witnesses and the notary, who will confirm the authenticity of the document.
Seller
This is the person who is transferring ownership of a certain item to the buyer. The seller is usually defined in the bill of sale as the transferor. In some cases, more than one transferor can be listed in the bill of sale.
Buyer
The buyer is the person who obtains ownership of a certain item by paying the purchase price. In the bill of sale, they can also be referred to as the transferee.
Buyer and Seller Disclosure
The seller must disclose any damages and flaws in the bill of sale. Apart from this disclosure, the bill of sale will indicate that the buyer agrees to buy the item “as is.” This means that the buyer agrees to buy the item with all its flaws and damages.
By providing these disclosures, the seller limits their liability for any future claims from the buyer. However, the seller is still liable for hidden damages or damages that were lied about.
Colorado Bill of Sale Description of Goods
This section provides information about the item that is being transferred. In some cases, the governmental agencies in charge of the item registration will provide the information that must be included in the bill of sale.
This section will look different for the different types of items. For example, when transferring the motor vehicle, your description of goods shall contain the following:
Mandatory Information
Made, model, and color of the vehicle
Vehicle year of production
Horsepower of the vehicle
Vehicle identification number (VIN)
Odometer disclosure
Description of any damages
However, some other types of items cannot be described in this way. The rule of thumb is to describe the item in a way that makes it distinguishable from other items of the same kind. If the item has a serial number, including it in your bill of sale is always a good idea.
Colorado Bill of Sale Purchase Price
In the section below you can find the most common methods for compensating the seller when transferring the item:
#1. Payment
With this method, the buyer transfers a certain amount of money to the seller in exchange for the purchased item. The payment can be made in cash, using checks, debit or credit cards, or by bank transfer.
#2. Trade
Here, the buyer gives a certain item to the seller in exchange for the seller’s item. In some cases, the buyer can give the seller an additional amount of money to cover the difference in value between the items they are exchanging.
#3. Gift
If the item is transferred as a gift, there is no countervalue the buyer must give the seller in return. This is often done between family members to transfer ownership of a certain item. However, the parties must enter the estimated value of an item for tax purposes.
Colorado Bill of Sale for Motor Vehicles (Cars) Requirements
The Colorado DMV is the governmental body that is in charge of motor vehicle registration. On their website, you can see in which specific cases you need to submit the bill of sale for vehicle registration.
Out-of-State Vehicles
A new Colorado resident must register their vehicle within 90 days of becoming a resident, according to the instructions provided by the Colorado DMV.
When applying for vehicle registration, you must submit the bill of sale for tax purposes.
Abandoned or Junk Vehicles
The vehicles that are damaged to the extent that the repair cost exceeds the value of the vehicle are classified in Colorado as salvage vehicles.
If you purchase a salvage vehicle in Colorado, you must obtain a salvage certificate of title within 60 days from the moment you bought the vehicle. In this case, the bill of sale will serve as proof of the moment when the purchase occurred.
Vehicles Sold by Dealers
In most cases, when buying a motor vehicle from a dealer, they will provide you with a copy of the bill of sale.
Vehicles Sold by Private Parties
The private parties can draft their own bill of sale or fill out the bill of sale form at the local DMV office.
Colorado Bill of Sale for Boats (Vessel) Requirements
Every boat or vessel in Colorado must be registered with the Colorado Parks & Wildlife (CPW) Department.
Although not required by law, it is good to draft a bill of sale when transferring the boat or vessel, as it will enable you to operate it for 30 days before registration.
Colorado Bill of Sale for Firearms Requirements
The seller should use the bill of sale to protect themselves from liability if the firearm is used in illegal activity after the purchase.
The firearm buyer can use the bill of sale for tax or insurance purposes.
The state of Colorado doesn’t provide the firearm bill of sale template, so you can download a template here or make one on your own.
Colorado Bill of Sale for Horses Requirements
When buying a horse in Colorado, you don’t have to register it. However, you should draft and sign the bill of sale to record the transaction for accounting and liability purposes.
Colorado Bill of Sale for Trailers (RVs) Requirements
In Colorado, all trailers must be registered, and although the bill of sale is not required for the registration, having this document will safeguard your rights and interests after the purchase.
Colorado Bill of Sale Other Requirements
The bill of sale must be issued to each of the parties signing it. Additionally, you should consider making extra copies in case you have to register your item with the local governmental agency.
The bill of sale form is quite flexible, meaning that you can draft it in any language that all parties can understand. However, bear in mind that the bill of sale you submit to the governmental agencies must be drafted in English, or an official English translation must be attached to it.
Colorado Bill of Sale Taxes
The parties usually use the bill of sale as proof of purchase for tax purposes.
The bill of sale should include a warning of legal liability in the event of a falsely reported purchase price.
Colorado Bill of Sale FAQ
Yes, as long as your bill of sale contains all the necessary elements, it can be made in any form, including handwriting.
Both the buyer and the seller must sign the bill of sale.
You can find the bill of sale form available at your local governmental office in charge of the registration of your vehicle.
If they don’t provide the bill of sale form, you can create one yourself or download one of the Colorado bill of sale templates available on our website.
Both the buyer and the seller benefit from signing the lease agreement. The buyer has proof that they have paid the purchase price. Sellers protect themselves from liability after transferring ownership of the item.