No, this is a withholding tax, a prepayment of income (or franchise) tax due from sellers on the gain from the sale of California real property. Filing a non-resident or part-year resident CA return to report the gain may result in a partial or total refund of the tax withheld.
CA does this to ensure they collect tax from out-of-state (or former) residents on the sale of CA real estate.California law requires withholding when a person (an individual, business entity, trust, or estate) sells California real property unless the seller qualifies for an exemption.
See FTB Publication 1016 Real Estate Withholding Guidelines for additional information.
