California Code of Regulations › Title 18 - Public Revenues › Division 3 - Franchise Tax Board › Chapter 2.6 - Administration of Franchise and Income Tax › Subchapter 2 - Returns › Article 5 - Withholding › Section 18662-2 - Definitions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Buyer. The term
					 "buyer" includes the buyer or any other transferee of property.
(b) California Business Entity. For purposes
					 of withholding, the term "California business entity" is a business entity as
					 defined in Regulation section
					 23038(b) -
					 2, subsection (a), that is
					 incorporated, organized, or formed, and existing under the laws of California,
					 or is qualified through the Office of the Secretary of State to transact
					 intrastate business. A business entity that has not qualified to transact
					 intrastate business (such as a corporation engaged exclusively in interstate
					 commerce) will be considered as having a permanent place of business in
					 California only if it maintains an office in California that is permanently
					 staffed by its employees.
(c)
					 California Real Estate. The term "California real estate" has the same meaning
					 as the term "California real property interest" as defined in Revenue and
					 Taxation Code section
					 18662,
					 subdivision (e)(5). For purposes of Regulation sections
					 18662-0 through
					 18662-8, an ownership interest
					 does not include an option to acquire real estate, unless the option is
					 exercised by the seller/transferor and the real property is
					 transferred.
(d) California
					 Resident. The term "California resident" includes every individual who is in
					 California for other than a temporary or transitory purpose, and any individual
					 domiciled in California who is absent for a temporary or transitory purpose.
					 (See Revenue and Taxation Code section
					 17014
					 and Regulation section
					 17014.)
(e) California Trust or Estate. For purposes
					 of withholding, a trust is considered a California trust if at least one
					 fiduciary is a California resident or a California business entity, or if the
					 decedent was a California resident on the date of death. An estate is
					 considered a California estate for withholding purposes when the decedent was a
					 California resident on the date of death.
(f) Exempt Organization. The term "exempt
					 organization" means an organization that meets the requirements of Chapter 4 of
					 Part 11 of the Revenue and Taxation Code (commencing with section
					 23701) or Subchapter F of the
					 Internal Revenue Code (commencing with section
					 501), that is exempt from
					 withholding under this regulation.
(g) Individual. The term "individual" means a
					 natural person. (See Revenue and Taxation Code section
					 17005.)
(h) Items of Income. For purposes of
					 withholding, the term "income" includes items of income that are included in
					 the information return reporting requirements of Article 5 of Chapter 2 of Part
					 10.2, Division 2 of the Revenue and Taxation Code (section
					 18631 et seq.) and federal
					 provisions incorporated by reference. The items of income include, but are not
					 limited to, interest, dividends, rents, royalties, prizes and winnings,
					 premiums, annuities, emoluments, compensation for personal services including
					 bonuses, partnership income, or gains, and other fixed or determinable annual
					 or periodical gains, profits, and income.
(i) Non-California Business Entity. For
					 purposes of withholding, a non-California business entity means any business
					 entity that does not meet the requirements of a California business entity as
					 set forth in subsection (b), herein.
(j) Nonresident. A "nonresident" or
					 "nonresident individual" is an individual who does not meet the requirements of
					 a California resident as set forth in subsection (d), herein.
(k) Nonresident alien. "Nonresident alien"
					 has the same meaning as defined in Internal Revenue Code section
					 7701(b)(1)(B).
(l) Nonresident Estate or Trust. For purposes
					 of withholding, the term "nonresident estate or trust" means an estate or trust
					 that does not meet the requirements to be a California estate or trust as set
					 forth in subsection (e), herein.
(m) [Reserved]
(n) Partner. The term "partner" has the same
					 meaning as defined in Revenue and Taxation Code section
					 17008.
					 For purposes of withholding, members of limited liability companies classified
					 as partnerships and owners of multiple-owner entities are included in the term
					 "partner" under Regulation sections
					 18662-0 through
					 18662-8.
(o) Partnership. The term "partnership" has
					 the same meaning as defined in Revenue and Taxation Code section
					 17008.
					 This includes a syndicate, group, pool, joint venture, or other unincorporated
					 organization, through or by means of which any business, financial operation,
					 or venture is carried on, and which is not a trust, estate, or corporation. For
					 purposes of withholding, limited liability companies classified as
					 partnerships, limited partnerships, and limited liability partnerships are
					 treated as partnerships under Regulation sections
					 18662-0 through
					 18662-8.
(p) [Reserved]
(q) Payee. The term "payee" includes, but is
					 not limited to, any person, partner, member, corporation, limited liability
					 company, partnership, fiduciary, business entity, association, joint venture
					 (whether or not classified as a disregarded entity for tax purposes), estate,
					 trust, foreign entity, agency, or political subdivision that receives payments
					 from a payer. The term "payee" also includes any person who receives payments
					 or distributions from a pass-through entity, estate, or trust.
(r) Payer. The term "payer" means the person
					 who makes a payment or a distribution to a payee. The payer includes a
					 withholding agent. The term also includes any person making a payment to an
					 intermediary, pass-through entity, or person to the extent the intermediary,
					 pass-through, or person provides a Form W-9 or other appropriate information
					 relating to a payee so that the payment can be reported under Chapter 61 of the
					 Internal Revenue Code.
(s)
					 Permanent Place of Business. A business entity has a "permanent place of
					 business" in California if it is organized and existing under the laws of
					 California or, if a foreign corporation, it has qualified through the Office of
					 Secretary of State to transact intrastate business. A business entity that has
					 not qualified to transact intrastate business, for example, a corporation
					 engaged exclusively in interstate commerce, will be considered as having a
					 permanent place of business in California only if it maintains a permanent
					 office in California permanently staffed by its employees.
(t) Person. The term "person" has the same
					 meaning as defined in Revenue and Taxation Code section
					 17007,
					 and includes individuals as well as business entities.
(u) Real Estate Escrow Person. The term "real
					 estate escrow person" has the same meaning as defined in Revenue and Taxation
					 Code section
					 18662,
					 subdivision (e)(6), plus Regulation sections
					 18662-0
					 through
					 18662-8,
					 and includes any attorney, escrow company, or title company, responsible for
					 closing the transaction, or any other person who receives and disburses the
					 consideration or value for the interest or property conveyed.
(v) Remitter. The term "remitter" means any
					 person who is required under Revenue and Taxation Code section
					 18662
					 and Regulation sections
					 18662-0
					 through
					 18662-8
					 to remit any tax withheld on any disposition from the sale or exchange of
					 California real estate by California resident and nonresident individuals and
					 non-California business entities to the Franchise Tax Board on or before the
					 due dates required by Regulation sections
					 18662-0 through
					 18662-8, and who is required to
					 make the information returns prescribed under forms and instructions by the
					 Franchise Tax Board. The term "remitter" applies to the person who will remit
					 the withheld tax on any disposition from the sale or exchange of California
					 real estate and file the prescribed forms on the buyer's/transferee's
					 behalf.
(w) Seller. The term
					 "seller" includes the seller or any other transferor of real
					 property.
(x) Transferee. The term
					 "transferee" of real property has the same meaning as in Revenue and Taxation
					 Code section
					 18662, subdivision (e), and
					 includes the buyer of the real property, and, in a deferred exchange, an
					 intermediary or exchange accommodator as set forth in Revenue and Taxation Code
					 section 18662, subdivision (e).
(y) Transferor. The term "transferor" of real
					 property has the same meaning as in Revenue and Taxation Code section
					 18662, subdivision (e), and
					 includes the seller of the real property, and, in a deferred exchange, an
					 intermediary or exchange accommodator as set forth in Revenue and Taxation Code
					 section 18662, subdivision (e).
(z) Withholding Agent. The term "withholding
					 agent" means the person that has the control, receipt, custody, disposal, or
					 payment of an item of income of a person subject to withholding. Any person who
					 meets the definition of a withholding agent is required to remit any tax
					 withheld and to make the information returns prescribed under forms and
					 instructions by the Franchise Tax Board. The term "withholding agent" also
					 means the person charged by the law or by the Franchise Tax Board's order or
					 regulation with the duty to withhold any tax, interest or penalties from
					 payments to the taxpayer and to remit such amounts over to the Franchise Tax
					 Board.
1.
						Amendment filed 12-12-67; effective thirtieth day thereafter (Register 67, No.
						50).
2. Renumbering from 18662-18810(b) filed 12-14-71; procedural
						amendment filed 12-16-71; effective upon filing (Register 71, No.
						51).
3. Repealer and new section filed 2-22-74; effective thirtieth
						day thereafter (Register 74, No. 8).
4. Amendment filed 4-9-81;
						designated effective 6-30-81 (Register 81, No. 15).
5. Renumbering
						and amendment of Section
						18662(b) to
						Section 18662-2 filed 8-19-82; effective
						thirtieth day thereafter (Register 82, No. 34).
6. Editorial
						correction (Register 83, No. 19).
7. Amendment filed 2-19-86;
						effective thirtieth day thereafter (Register 86, No. 8).
8. Change
						without regulatory effect renumbering and amending former section
						18805-2 to section
						18662-2 filed 11-23-98 pursuant to
						section 100, title 1, California Code of
						Regulations (Register 98, No. 48).
9. Repealer and new section
						heading and section and amendment of NOTE filed 3-10-2014; operative 7-1-2014
						(Register 2014, No. 11).
10. Amendment of subsection (c), new
						subsection (v) and subsection relettering filed 10-8-2019; operative 10-8-2019
						pursuant to Government Code section
						11343.4(b)(3)
						(Register 2019, No. 41).
Note: Authority cited: Section
						  19503,
						  Revenue and Taxation Code. Reference: Section
						  18662,
						  Revenue and Taxation Code.