Management and Performance Review of County Government ...

Enterprise Operations of Jefferson County
RECOMMENDATION 8-18:
Jefferson County leaders and SETRA management should explore ways to
maximize their opportunities in the evolving TTC project.
This could include marketing strategies to attract companies that could benefit
from the low rents and large tracts of land available at the airport. The properties offer
numerous commercial opportunities, such as locating certain facilities in the airport’s
Foreign Trade Zone (FTZ).
Foreign Trade Zones
A foreign trade zone is a designated site, licensed by the federal Foreign Trade Zones
(FTZ) Board, at which special customs procedures may be used. These procedures
allow domestic activity involving foreign items to take place before formal customs entry.
Duty-free treatment is accorded items that are re-exported and duty payment is deferred
on items sold in the U.S. market, thus offsetting customs advantages available to
overseas producers who compete with American producers. Subzones are specialpurpose
zones, usually at manufacturing plants. A site that has been granted zone
status may not be used for zone activity until approved for FTZ activation by local U.S.
Customs and Border Protection (CBP) officials, and the zone activity remains under
CBP’s supervision. FTZ sites and facilities remain within the jurisdiction of local, state
and federal agencies.
What are the benefits to a zone user?
• Duty exemption: no duties or quota charges on re-exports.
• Duty deferral: customs duties and federal excise tax are deferred on
imports.
• “Inverted” tariff: when zone manufacturing results in a finished product
that has a lower duty rate than those on foreign inputs, the finished
products may be entered at the duty rate that applies to its condition as
it leaves the zone, subject to public interest considerations.
• Logistical benefits: companies using FTZ procedures may have access
to streamlined customs procedures (e.g. "weekly entry" or "direct
delivery").
• Other benefits: foreign and domestic goods held for export are exempt
from state and local inventory taxes. FTZ status also may also make a
site eligible for state and local benefits unrelated to the FTZ Act.
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