FTZ Benefits

• Tariffs are decreased on finished goods made in a Zone from foreign components where an inverted tariff structure applies to components and finished goods.
• Tariffs are avoided on U.S. components and labor incorporated into foreign goods.
• Payment of duty is deferred on goods in a Zone until they are actually brought into the U.S. Customs Territory. This results in cash flow savings.
• Tariffs are avoided on destroyed, defective or returned merchandise.
• State and local inventory tax is reduced, delayed or eliminated.
• Customs documentation paperwork is reduced.
• Shipments can be expedited because labeling, marking and invoicing can be done in a Zone by the user.
• Transportation expenses can be reduced by the ease of customs procedures, and direct shipment from abroad to a Zone.
• Quota restricted merchandise can be brought into a Zone.
• Merchandise can be exhibited without having to liquidate customs duties.

Save Money

• Imports may enter and be held in an FTZ without customs duties. Duty is paid only when those imports are shipped into U.S. Customs Territory.
• Customs duties are not paid on merchandise exported from an FTZ.
• Duties are reduced or eliminated on materials subject to defect, damage, obsolescence, waste and scrap.
• Duties are not owed on labor, overhead or profit attributed to FTZ production operations.
• FTZ users can pay the duty rate on component material or merchandise produced from component materials -whichever is lower.
• Merchandise may be exported and returned to an FTZ without duty payment.
• Spare parts may be stored, returned or destroyed without paying duty.
• Most merchandise subject to U.S. quotas may be held in an FTZ until quotas open.
• Delays in customs clearances and duty drawback procedures are eliminated.
• Quality control inspections can identify sub-standard goods to be destroyed or returned without duty payment.
• No country-of-origin labels are required on merchandise admitted to an FTZ.
• Customs supervision of security procedures saves on individual security expenses and insurance.
• Increased accountability reduces problems with inaccurate inventory, receiving and shipment, and helps track waste and scrap.
• Merchandise used/consumed in FTZ processing is generally not subject to duties.
• Tangible personal property held in an FTZ for export is not subject to state and local ad valorem taxes. Most states and counties exempt all FTZ merchandise from inventory taxes.
• Merchandise may be held for exhibition without duty payment.
• Duty payable on FTZ merchandise need not be included when calculating insurable value.
• Due to FTZ security, discounted cargo insurance rates (up to 40% off) have been negotiated.
• No duty is owed on in-bond, Zone-to-Zone transfer of FTZ merchandise.
• Title of merchandise may be transferred to an FTZ if there is no "retail" sale.
• Specific merchandise ID is unnecessary. FIFO (first in - first out) and FOCI (foreign first) inventory methods are acceptable in an FTZ.