For sales and use tax purposes, when does a sale take place?

A sale for sales and use tax purposes can be considered to take place at either the time of title transfer or when possession of the goods is transferred. This dual consideration recognizes that both the legal ownership of the item (title) and the physical control of the item (possession) are significant in determining the point at which the sale is complete for tax purposes.

When title is transferred, the buyer legally owns the goods, which is a traditional benchmark for defining a sale. However, sales tax may also apply when possession of an item is given to the buyer, even if full title has not yet been officially transferred. This perspective acknowledges scenarios such as consignment sales or sales with contingent title transfer, where possession is delivered to the buyer before legal ownership.

Thus, the understanding that a sale takes place either at title transfer or at possession transfer captures the practical realities of commerce and provides clarity on the timing for tax obligations, making it essential for sales and use tax compliance.