Is the Real Estate Withholding Tax an additional tax on sale of Oregon Real Property?
According to the Oregon Department of Revenue, "the withholding tax is not an additional tax due but instead a prepayment of tax, like estimated payments of a personal or corporate tax based on income. When you file your income tax return to determine your actual tax, the withholding will appear as a credit against any taxes you owe. If you have an overpayment, it will be refunded to you."
For example, if lets assume a taxpayer had $10,000 withheld on the sale of his or her Oregon rental property, then when that taxpayer filed his or her Oregon Form 40N by the due date, and that the actual Oregon tax liability was $8,000. then that taxpayer would receive a $2,000 tax refund as an overpayment of the real estate taxes.