1. (a) Types of Withholding -- Application of Regulation Sections 18662-0 through 18662-8.

   1. (1) Overview.

2. (b) Withholding of Tax at Source.

   1. (1) General.
   2. (2) Real Estate Withholding.
   3. (3) Withholding by Withholding Agent.

3. (c) Withholding Required After Notification.

   § 18662-2. Definitions.

4. (a) Buyer.
5. (b) California Business Entity.
6. (c) California Real Estate.
7. (d) California Resident.
8. (e) California Trust or Estate.
9. (f) Exempt Organization.
10. (g) Individual.
11. (h) Items of Income.
12. (i) Non-California Business Entity.
13. (j) Nonresident.
14. (k) Nonresident Alien.
15. (l) Nonresident Estate or Trust.
16. (m) [Reserved].
17. (n) Partner.
18. (o) Partnership.
19. (p) [Reserved].
20. (q) Payee.
21. (r) Payer.
22. (s) Permanent Place of Business.
23. (t) Person.
24. (u) Real Estate Escrow Person.
25. (v) Remitter.
26. (w) Seller.
27. (x) Transferee.
28. (y) Transferor.

29. (z) Withholding Agent.

    § 18662-3. Real Estate Withholding.

30. (a) General.
31. (b) Statutory Basis and Rates.

32. (c) Who Must Withhold -- Required Notification and Responsibility.

    1. (1) Notification.
    2. (2) Penalties for Failure to Provide Notice.
    3. (3) The Real Estate Escrow Person May Assist the Buyer/Transferee With the Buyer's/Transferee's Withholding Obligations.

33. (d) Exemption and Withholding Requirements.

    1. (1) Full Exemption Under FTB Form 593.
    2. (2) Transfers Requiring an Exemption Certificate to Exempt the Sale From Withholding on FTB Form 593.
    3. (3) Transfers That May Partially or Fully Exempt the Sale from Withholding.

34. (e) Withholding on Special Entities.

    1. (1) Grantor Trusts.
    2. (2) Trusts.
    3. (3) Bankruptcy Trusts and Estates.
    4. (4) Estates.
    5. (5) Conservatorships and Receiverships.
    6. (6) Relocation Companies.

35. (f) Procedures.

    1. (1) Exemption Certificate and Estimated Gain or Loss Certificate.
    2. (2) Verification.
    3. (3) Electing the Alternative Withholding Calculation.

36. (g) Special Rules.

    1. (1) Multiple Family Units.
    2. (2) Multiple Sellers/Transferors.
    3. (3) Sellers/Transferors on Title for Incidental Purposes.
    4. (4) Sale of Multiple Parcels.
    5. (5) Leaseholds/Options.
    6. (6) Personal Property Included in Real Estate Transaction.
    7. (7) Short Sale Transactions.
37. (h) FTB Form 593, Real Estate Withholding Statement.

38. (i) FTB Form 593-V, Payment Voucher for Real Estate Withholding.

    § 18662-4. Withholding on Payments (Nonresident Withholding -- General.

39. (a) Nonresident Individuals and Non-California Business Entities; De Minimis Amounts; and Rate.

    1. (1) Nonresident Individuals and Non-California Business Entities.
    2. (2) De Minimis Amounts.
    3. (3) Rate.
    4. (4) Cross-References.

40. (b) Optional Withholding or No Withholding Required.

    1. (1) California Residents.
    2. (2) California Business Entities.
    3. (3) Tax Exempt Organizations.
    4. (4) California Estates and Trusts.
    5. (5) Banks and Banking Associations.
    6. (6) Sale of Goods.
    7. (7) Services of a Nonresident Outside of California.
    8. (8) Intangible Personal Property.
    9. (9) Motor Carrier Compensation.
    10. (10) Wages Paid to Employees.
    11. (11) Nonresident Corporate Directors.
    12. (12) Insurance Companies, Individual Retirement Plans, Pension or Profit Sharing Plans.
    13. (13) Income from Qualified Investment Securities.

41. (c) Withholding Exemption Certificates.

    1. (1) General.
    2. (2) Incomplete or Invalid Exemption Certificates.
    3. (3) California Address.
    4. (4) False Certificate.
42. (d) Information Returns Also Required.

43. (e) Waivers and Reduced Amounts.

    1. (1) Waivers.
    2. (2) Request for Reduced Withholding Amount.
    3. (3) Other Conditions As May Be Required.
44. (f) Requirement to File a California Return.
45. (g) Suspended and Forfeited Corporations.
46. (h) FTB Form 590, Withholding Exemption Certificate.
47. (i) FTB Form 592, Resident and Nonresident Withholding Statement.
48. (j) FTB Form 592-PTE, Pass-Through Entity Annual Withholding Return.
49. (k) FTB Form 592-F, Foreign Partner or Member Annual Withholding Return.
50. (l) FTB Form 588, Nonresident Withholding Waiver Request.

51. (m) FTB Form 589, Nonresident Reduced Withholding Request.

    § 18662-5. Other Types of Payments and Withholding Obligations.

52. (a) Payments to Nonresidents Subject to Withholding.

    1. (1) General.
    2. (2) California Source Income Subject to Withholding.
    3. (3) Business Situs.
    4. (4) Payments to Nonresident Aliens or Foreign Entities.
    5. (5) Payments Made to Reimburse Expenses.
    6. (6) Services in Connection With the Sale of Goods.
53. (b) Payments to Independent Contractors.

54. (c) Payments to Nonresident Subcontractors.

    1. (1) Withholding Requirements.
    2. (2) Payments to California Residents.
    3. (3) General Contractor Obligations.
    4. (4) Multiple Contractors/Contractor-of-Record.

55. (d) Rent or Lease Payments to Nonresidents.

    1. (1) Rent or Lease Payments Made to Nonresidents.
    2. (2) Types of Rental or Leased Property Subject to Withholding.

56. (e) Royalty Payments Made to Nonresidents.

    1. (1) Compensation for the Right to Use Natural Resources.
    2. (2) Compensation for Services Derived from Intangible Property Having a Taxable or Business Situs in California.

57. (f) Payments to Corporate Directors.

    1. (1) Withholding Not Required.
    2. (2) Filing of Information Return.
58. (g) Seminar Speakers and Expert Witnesses.

59. (h) Income Allocation.

    1. (1) Nonresident Contractors.
    2. (2) Reliance on Allocations Provided by Payees.
    3. (3) Allocation Based on Time.
    4. (4) Reasonable Method of Allocation Based on Goods and Services.
    5. (5) Allocation of Distributions.
60. (i) FTB Form 588, Nonresident Withholding Waiver Request.
61. (j) FTB Form 589, Nonresident Reduced Withholding Request.
62. (k) FTB Form 587, Nonresident Withholding Allocation Worksheet.

63. (l) FTB Form 590, Withholding Exemption Certificate.

    § 18662-6. Nonresident Withholding, Entertainers, Athletes, and Speakers.

64. (a) Payments Subject to Withholding.

    1. (1) General.
    2. (2) Payments Made to Entertainer's Agents or Promoters.
    3. (3) Sound and Lights.
65. (b) Request for Waiver or Reduced Withholding Amount.

66. (c) Exceptions.

    1. (1) California Resident.
    2. (2) California Business Entity.
    3. (3) Tax Exempt Organization.
    4. (4) Total Payments Equal to or Less Than $1,500.
    5. (5) Services Performed Outside of California.
    6. (6) Withholding Waiver Received.
67. (d) Entertainment Venues Having Similar Names.
68. (e) Canceled Performances.

69. (f) Additional Rules for Athletes.

    1. (1) Duty Days.
    2. (2) Performance and Signing Bonuses.
70. (g) FTB Form 590, Withholding Exemption Certificate.
71. (h) FTB Form 592, Resident and Nonresident Withholding Statement.
72. (i) FTB Form 588, Nonresident Withholding Waiver Request.

73. (j) FTB Form 589, Nonresident Reduced Withholding Request.

    § 18662-8. Reporting and Remitting Amounts Withheld, Penalties, and Interest; Other Procedures.

74. (a) General.

75. (b) Real Estate Sales -- Information Returns.

    1. (1) Payment Due Dates and Form.
    2. (2) Reporting.

76. (c) Withholding From Payments Other Than Real Estate Sales.

    1. (1) Payment Due Dates.
    2. (2) Reporting.
    3. (3) Electronic and Magnetic Media.
    4. (4) Withholding Adjustments.

77. (d) Interest and Penalties.

    1. (1) Interest.
    2. (2) Penalties and Liabilities.
78. (e) Other Information Returns.
79. (f) Coordination With Group Returns.
80. (g) FTB Form 593, Real Estate Withholding Tax Statement.
81. (h) FTB Form 593-V, Payment Voucher for Real Estate Withholding.
82. (i) FTB Form 592, Resident and Nonresident Withholding Statement.
83. (j) FTB Form 592-V, Payment Voucher for Nonresident or Resident Withholding.
84. (k) FTB Form 592-PTE, Pass-Through Entity Withholding Return.
85. (l) FTB Form 592-Q, Payment Voucher for Pass-Through Entity Withholding.
86. (m) FTB Form 592-F, Foreign Partner or Member Annual Withholding Return.
87. (n) FTB Form 592-A, Payment Voucher for Foreign Partner or Member Withholding.
88. (o) FTB Form 592-B, Resident and Nonresident Withholding Tax Statement.

§ 18662-1. Withholding -- Generally.

Note: Authority cited: Section 19503, Revenue and Taxation Code. Reference: Section 18662, Revenue and Taxation Code.

History

1. New section filed 3-10-2014; operative 7-1-2014 (Register 2014, No. 11).

2. Change without regulatory effect amending subsection 18662-3(c)(3) filed 12-9-2014 pursuant to section 100, title 1, California Code of Regulations (Register 2014, No. 50).

3. Amendment filed 10-8-2019; operative 10-8-2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 41).