California property management companies must withhold a portion of rent collected from California properties that are owned by their clients who reside outside of the state. This rule applies only to out-of-state owners. The management company must – on a quarterly basis – forward those funds to the Franchise Tax Board (FTB) along with the required FTB forms. When rental payments are greater than $1,500 per calendar year, the management company must withhold 7 percent of the rent collected.


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