California property managers who disburse the net proceeds from the properties they manage to owners who are not residents of California (or are entities not qualified to do business in California) must withhold 7% of all disbursements exceeding $1,500 annually. The withheld funds are to be sent to the Franchise Tax Board (FTB). Property managers have until January 1, 2010 to comply with this withholding requirement.
first tuesday take: The above rule is not new, but it will be news to some property managers. For more of the latest from the California Department of Real Estate, see the bulletin linked below.
Re: “Nonresident withholding requirements for California property managers”, from DRE Real Estate Bulletin, Fall 2009
For the most recent updates to California’s withholding rules, see first tuesday’s recent Legislative Watch pertaining to withholding requirements on a sale of real estate by out-of-state entities.