[Esel Mann]

Rwebb,

If I understand the OP correctly, CA is snagging 3.5% upfront (for the benefit of its residents collectively) and then the seller needs to reconcile year end with the state . Most likely CA is trying to solve some sort of cash flow issue? Seems almost like sellers are being forced into loaning the state money but in such a way as it doesn't fall under the borrow bucket for the state?

Additionally if I understand the OP correctly, there is a $50.00 processing fee in processing the 3.5% mandate by CA. If this is correct, then because it is cash flow into the state to keep the state running, for which all its residents benefit, it would seem then such a cost burden in implementing and carrying out such a program be like others, the tax payers of the state collectively are on the hook and not just the seller.