Foreign Trade Zone
Foreign Trade Zones have become an important strategic tool for manufacturers of any volume and a critical component for companies importing product and carrying inventory.
Tejon Ranch Commerce Center offers a 177-acre, expandable to 500 acres, active Foreign Trade Zone, which allows users to move merchandise directly from port of arrival to the FTZ, avoiding delays at congested ports. IKEA is utilizing the Foreign Trade Zone benefits at Tejon Ranch Commerce Center.
Foreign Trade Zone benefits include:
- Duty Reduction on Inverted Tariff Situations:
With specific authority, zone users may choose the lower duty rate when a product is entered into customs territory (for import) in inverted tariff situations (when the tariff rate on foreign inputs is higher than the tariff rate applied to the finished product produced in the zone).
- Duty Deferral:
Cash flow savings can result because customs duties are paid only when and if the goods are transferred from the zone to U.S. customs territory for consumption.
- Duty Exemption on Exports:
No duty is payable on goods that are exported from a zone, or scrapped or destroyed in a zone.
- Duty Drawback Elimination:
Zones eliminate the need for duty drawback—the refunding of duties previously paid on imported, then re-exported, merchandise.
- Tax Savings:
Goods stored in zones, and goods exported, are not subject to state and local ad valorem taxes, such as personal property taxes, where applicable.
- Zone-to-Zone Transfer:
Zones can transfer merchandise “in-bond” (i.e., insured) from one zone to another. Customs duties may be deferred until the product’s eventual entry into U.S. customs territory.
- Customs Inventory Control Efficiencies:
Cost savings (especially cash-flow savings) can occur from zone efficiencies affecting inventory control. These efficiencies include customs procedures such as direct delivery and weekly entries.
U.S. Foreign-Trade Zones Board