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Instructions for Form 590 Withholding Exemption Certificate References in these instructions are to the California Revenue and Taxation Code (R&TC). General Information A Purpose Use Form 590 to certify an exemption from nonresident withholding. Complete and present Form 590 to the withholding agent. The withholding agent will then be relieved of the withholding requirements if the agent relies in good faith on a completed and signed Form 590 unless told by the Franchise Tax Board (FTB) that the form should not be relied upon. Important — This form cannot be used for exemption from wage withholding. Any questions regarding wage withholding should be directed to the California Employment Development Department. Do not use Form 590 if you are a seller of California real estate. Sellers of California real estate should use Form 593-C, Real Estate Withholding Certificate. B Law R&TC Section 18662 requires withholding of income or franchise tax on payments of California source income made to nonresidents of this state. Withholding is required on: • Payments to nonresidents for services rendered in California; • Distributions of California source income made to domestic nonresident partners and members and allocations of California source income made to foreign partners and members; • Payments to nonresidents for rents if the payments are made In the course of the withholding agent's business; • Payments to nonresidents for royalties for the right to use natural resources located in California; • Distributions of California source income to nonresident beneficiaries from an estate or trust; and • Prizes and winnings received by nonresidents for contests in California. For more information on withholding and waiver requests, get FTB Pub. 1017, Nonresident Withholding Partnership Guidelines, and FTB Pub. 1023, Nonresident Withholding Indepen- dent Contractor, Rent and Royalty Guidelines. To get a withholding publication see General Information G. C Who can Execute this Form Form 590 can be executed by the entities listed on this form. Note: In a situation where payment is being made for the services of a performing entity, this form can only be completed by the performing entity or the performing entity's partnership or corporation. It cannot be completed by the performing entity's agent or other third party. Note: The grantor of a revocable/grantor trust shall be treated as the vendor/payee for withholding purposes. Therefore, if the vendor/ payee is a revocable/grantor trust and one or Form 590 Instructions (REV. 2003) more of the grantors is a nonresident, withhold- ing is required. If all of the grantors of a revocable/grantor trust are residents, no withholding is required. Resident grantors can check the box on Form 590 labeled "Individuals — Certification of Residency." U Who is a Resident A California resident is any individual who is in California for other than a temporary or transitory purpose or any individual domiciled in California who is absent for a temporary or transitory purpose. An individual domiciled in California who is absent from California for an uninterrupted period of at least 546 consecutive days under an employment -related contract is considered outside California for other than a temporary or transitory purpose. Note: Return visits to California that do not total more than 45 days during any taxable year covered by the employment contract are considered temporary. This provision does not apply if an individual has income from stocks, bonds, notes, or other Intangible personal property in excess of $200,000 in any taxable year In which the employment -related contract is in effect. A spouse who is absent from California for an uninterrupted period of at least 546 days to accompany a spouse who is under an employ- ment -related contract is considered outside of California for other than a temporary or transitory purpose. Generally, an individual who comes to California for a purpose which will extend over a long or indefinite period will be considered a resident. However, an individual who comes to perform a particular contract of short duration will be considered a nonresident. For assistance in determining resident status, get FTB Pub, 1031, Guidelines for Determining Resident Status, or call the Franchise Tax Board at (800) 852-5711 or (916) 845-6500 (not toll -free). E What is a Permanent Place of Business A corporation has a permanent place of business in California if it is organized and existing under the laws of California or if it is a foreign corporation qualified to transact intrastate business by the California Secretary of State. A corporation that has not qualified to transact intrastate business (e.g., 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 that is perma- nently staffed by its employees. Withholding Agent Keep Form 590 for your records. Do not send this form to the FTB unless it has been specifically requested. Note: If the withholding agent has received Form 594, Notice to Withhold Tax at Source, only the performing entity can complete and sign Form 590 as the vendor/payee. If the performing entity completes and signs Form 590 indicating no withholding requirement, you must send a copy of Form 590 with Form 594 to the FTB. For more information, contact the Nonresident Withholding Section. See General Information G. The vendor/payee must notify the withholding agent If: • The individual vendor/payee becomes a nonresident; • The corporation ceases to have a permanent place of business in California or ceases to be qualified to do business in California; • The partnership ceases to have a permanent place of business in California; • The LLC ceases to have a permanent place of business in California; or • The tax-exempt entity loses its tax-exempt status. The withholding agent must then withhold. Remit the withholding using Form 592-A, Nonresident Withholding Remittance Statement, and complete Form 592, Nonresident Withholding Annual Return, and Form 592-B, Nonresident Withhold- ing Tax Statement, Get Instructions for Forms 592, 592-A, and 592-B for due dates and other withholding information. G Where to get Publications, Forms, and Additional Information You can download, view, and print FTB Publications 1017, 1023, 1024, and nonresident withholding forms, as well as other California tax farms and publications not related to nonresident withholding from our Website at: www.ftb.ca.gov You can also have nonresident withholding forms faxed to you by calling (800) 998-3676. To have publications or forms mailed to you or to get additional nonresident withholding information, please contact the Withholding Services and Compliance Section. WITHHOLDING SERVICES AND COMPLIANCE SECTION FRANCHISE TAX BOARD PO BOX 651 SACRAMENTO CA 95812-0651 Telephone: (888) 792-4900 (916)845-4900 (not toll -free) FAX: (916) 845-9512 (24 hours a day, 7 days a week) Assistance for persons with disabilities: We comply with the Americans with Disabilities Act. Persons with hearing or speech impair- ments please call TTY/PDD (800) 822-6268. Asistencia bilingge an espahol Para obtener servicios en espahol y asistencia pars completer su declaraciiin de impuestos/ formularies, (lame al numero de telefono (anotado arriba) qua to corresponde.