California 7% franchise tax for out-of-state rental property?

I live in Nevada and own a duplex in California. My property manager just told me that because I’m an out-of-state owner, California requires 7% withholding on the rental income once California-source payments exceed $1,500/year.

He called it a “7% franchise tax” and said this is standard for out-of-state owners.

Is this actually a California requirement? Is the 7% a tax I ultimately pay, or is it withholding that gets credited toward my California taxes when I file?

Just trying to understand if this is legitimate before I proceed.