If this entity ceases to be exempt from tax, I will promptly notify the withholding agent. Individuals cannot be tax-exempt entities.For state withholding, use the worksheets on this form. I am requesting that my property, or a portion thereof, be exempt from the City of San Diego's Rental Unit Business Tax for the reason(s) marked. EXEMPTION FROM WITHHOLDING: If you wish to claim exempt, complete the federal Form W-4. California State Tax Withholding Information: Employees should contact their personal tax advisors to determine individual withholding requirements. How to make a Claim of Exemption. You received this letter because we determined that you're not entitled to claim exempt status or more than a specified number of withholding allowances. Waived or Reduced Withholding. Research Request Form.