Federal IncentivesIncentivesTrade Incentives

Foreign Trade Zones

By January 13, 2013 No Comments

Federally-designated Foreign Trade Zones are U.S. Customs and Border Protection-approved locations where companies can engage in special procedures to help encourage U.S. activity by delaying or reducing duty payments on foreign merchandise. There are two types of Foreign Trade Zones: general-purpose zones (which are usually located at ports or industrial parks) and subzones (which are approved for a specific company or use).

Benefits:
• Duty exemption on re-exports.
• Customs duties and federal excise tax deferred on imports.
• In situations where zone production results in a finished product that has a lower duty rate than the rates on foreign inputs (inverted tariff), the finished products may be entered at the duty rate that applies to its condition as it leaves the zone (requires prior authorization).
• Streamlined customs procedures (e.g., “weekly entry” or “direct delivery”).
• Foreign goods and domestic goods held for export are exempt from state/local inventory taxes.
• Foreign Trade Zone status may also make a site eligible for state/local benefits which are unrelated to the Foreign Trade Zone Act.

General purpose Foreign Trade Zones in Los Angeles County:
• Long Beach (Zone No. 50), California Grantee: Board of Harbor Commissioners of the Port of Long Beach, P.O. Box 570, Long Beach, CA 90801-0570, Larry Ditchkus (562) 590-4162. This zone includes sites within the City of Industry.

• Los Angeles (Zone No. 202), California Grantee: Board of Harbor Commissioners of the City of Los Angeles, 425 South Palos Verdes Street, San Pedro, CA 90731, Masashi Morimoto, (310) 732-3843. For more information on this zone and subzones, go here.

• Palmdale (Zone No. 191), California Grantee: City of Palmdale, 38300 North Sierra Highway, Palmdale, CA 93550-4798, (661) 267-5125. This zone includes sites within the City of Santa Clarita. For more information on this zone, go here.

For more information on Foreign Trade Zones, go here.