Selling a vehicle to someone in another state and they want to drive it home but its currently registered and licensed in my name how does this work?

Assuming you have clear title to the car you are selling, you merely "sell" the car on the back of the title, thereby releasing your responsibility ... I would make a follow up visit to your local MVD and advise them of the sale, too. Sometimes this can be done online. Most states you should keep your plate, let the buyer worry about getting theirs. Sometimes buyers will slap an illegal plate on, not your problem. Keep a copy of the bill of sale for your own records.