A Michigan bill of sale is a document used to record the transfer of ownership of various personal property, such as vehicles, vessels, horses, etc., between the seller and buyer.
By reaching an agreement on the required elements and signing the bill of sale, parties create a legally binding relationship.
After that, both the seller and the buyer have evidence of the completed transaction, which affects their rights and responsibilities and any potential disputes relating to the purchase.
Michigan Bill of Sale Parties
The main bill of sale parties are the seller and buyer.
The seller transfers ownership of the personal property and is responsible for providing accurate information about the item being sold.
The buyer is the person or entity who purchases the personal property and is responsible for providing payment for the item.
Buyer and Seller Disclosure
This section is crucial as it contains significant details about the item’s condition.
In a motor vehicle sale, for example, the odometer reading disclosure is typically required to confirm the exact mileage of the vehicle.
If the item being sold is used or has known defects and the buyer agrees to purchase it in that condition, this information will be included in the bill of sale. This is done by including an "as is" clause, which outlines the buyer's acceptance of the item's condition.
In addition to these standard clauses, the parties may add others to further regulate the purchase and avoid disagreements.
Michigan Bill of Sale Description of Goods
The seller and the buyer should describe the item being sold in as much detail as possible. This is important for the transaction, the registration procedure, and obtaining the title before the state authorities.
For example, when selling a vehicle, specify the following details:
Location of the vehicle (state and county)
Make, model, and body type of the vehicle
Vehicle year of production
Vehicle Identification Number (VIN)
Description of any damages and flaws
The purpose of an item's description is to individualize and distinguish it from a similar one. Therefore, it is recommended that after entering the details in the bill of sale, the parties check once again whether everything corresponds to the agreement.
Michigan Bill of Sale Purchase Price
The three most common methods for compensating the seller when transferring the item are:
The most common ways to pay for seller’s items are cash, credit or debit cards, checks, or bank transfers.
In trade, the buyer gives a certain item to the seller in exchange for the seller’s item. In this case, the bill of sale should include the value of the buyer’s item in addition to the seller’s item.
Gifts can be given for various reasons, such as to show appreciation or strengthen ties between close family members. However, the gift recipient (buyer) is not obligated to give anything in return to the seller.
Michigan Bill of Sale for Motor Vehicles (Cars) Requirements
The sale or purchase of a motor vehicle in Michigan does not require a bill of sale. However, you should obtain one to document the transaction and as proof of purchase for tax purposes.
The state of Michigan recommends including specific details in a bill of sale, such as:
Vehicle description and vehicle identification number (VIN)
Seller guarantees or promises
The final sale price
Buyer and seller names
The vehicle's county and state of sale
You don't need a bill of sale if you're purchasing a motor vehicle from out of state for use in Michigan. However, to convert the out-of-state title to a Michigan title and register the vehicle in Michigan, you should acquire one.
Abandoned or Junk Vehicles
If you're dealing with an abandoned or junk vehicle, you don’t need a bill of sale to obtain a salvage title.
Vehicles Sold by Dealers
The process is usually straightforward if you're purchasing your vehicle from a dealer. The dealer will take care of all the necessary documentation, collect the required fees and taxes, and provide copies of all the documents you signed.
Vehicles Sold by Private Parties
If you are purchasing a vehicle from a private party, both parties must file the proper documents with the Secretary of State's office. Therefore, even though it is not required, it is advised that you create a bill of sale for your own protection and to document the transaction.
Michigan Bill of Sale for Boats (Vessel) Requirements
To transfer ownership of a vessel purchased from a dealer, the buyer must provide the dealer's bill of sale, which certifies that the tax has been paid in full.
A Michigan bill of sale for boats should provide specific details, such as the boat's hull ID number, make, model, and engine specifications, as well as the purchase price and date of sale.
Michigan Bill of Sale for Firearms Requirements
Federal law only mandates licensed firearm dealers to maintain records of firearm purchases. However, it is equally important for individuals to maintain a detailed record of their gun sales.
By keeping a record of the sale through a bill of sale, individuals can track the transaction details, such as the date of the sale, the type of firearm sold, and the identity of the buyer. Such information can be essential in proving ownership and preventing the gun from falling into the wrong hands.
Furthermore, law enforcement agencies keep track of gun sales to ensure that firearms do not end up in the hands of ineligible individuals, such as minors or those with a criminal history.
Michigan Bill of Sale for Horses Requirements
Although a bill of sale is not mandatory for horse sales, provide one as a formal record of your sale and include the following:
Parties' information and signatures (name, address, and contact information)
Name, age, gender, breed
ID number (if applicable)
Color, marks, or flaws
Disclosures of the buyer and seller
This information helps identify the horse in the event of loss or theft and provides valuable insight into the animal's history and potential capabilities.
Michigan Bill of Sale for Trailers (RVs) Requirements
Even though a bill of sale is not required for the purchase or sale of a trailer in Michigan, you should create one to record your transfer. This is especially important as all trailers must be registered with the state of Michigan.
Michigan bills of sale for trailers should include the following:
Make, model, and year of manufacture
Vehicle Identification Number (VIN)
Trailer's weight and dimensions
Names, addresses, and signatures of the parties
Michigan Bill of Sale Other Requirements
You can write a bill of sale in any language as long as both parties understand its content. However, keep in mind that English is a state-recognized language in Michigan, so submit the bill of sale in English or in a translated version to the authorities.
Each party should also keep a copy of the document for their own records and another copy in case the title or registration process requires it. This ensures that all parties have a clear record of the agreement and that the required legal processes are carried out smoothly and efficiently.
Michigan Bill of Sale Taxes
The state of Michigan implements a sales tax system. The current sales tax rate in Michigan is 6%, and it is imposed on most retail purchases, including vehicle sales.
As a seller, you are required by Michigan law to collect sales tax from the buyer at the time of purchase and send it to the state. However, the buyer remains liable for paying the sales tax, even if the seller fails to collect and remit it.
Yes, as long as the parties include the mandatory elements and sign it, a written bill of sale is legitimate in Michigan.
Each party must sign the bill of sale. In addition, bills of sale can be signed in the presence of witnesses to verify the document’s authenticity.
To create a proper bill of sale for any item you intend to buy or sell in Michigan, download one of our bill of sale templates. Our website offers a variety of customizable templates that fit your specific needs.
In the state of Michigan, both parties benefit from having a bill of sale. This legal document serves as a record of the ownership transfer and includes essential details that can prevent misunderstandings and protect the parties' rights.
So whether you are buying or selling, a bill of sale is a valuable tool to ensure a successful transaction.