Tampa Ship, llc making its zone site work
As merchandise is imported into the United States of America, it enters both the Geographical Territory and the Customs Territory of the U.S.
All merchandise that is imported into the United States is required to be in compliance with the appropriate U.S. federal regulatory entity, registered with U.S. Customs and Border Protection, and ultimately to have all applicable duties, taxes, and fees associated with the merchandise paid.
For customs and tariff purposes, merchandise that is imported and subsequently admitted into a U.S. Foreign-Trade Zone or FTZ No. 79 Zone Site is considered outside the Customs Territory of the United States and thus some compliance and payment requirements may be delayed, reduced, or even eliminated. However, the imported merchandise still needs to be registered with CBP.
Once the imported merchandise is withdrawn from the FTZ No. 79 Zone Site and formally entered into the Customs Territory of the United States, all applicable duties, taxes, and fees are due.
The following examples describe some of the benefits of operating within FTZ No. 79.
Proper Labeling
Inverted Tariff (An example of FTZ No. 79's manufacturing benefits)
Company No. 1 manufacturers a particular product, which we will call Product No. 1. In order to manufacture Product No. 1, Company No. 1 must import the raw materials necessary to manufacture Product No. 1, which we will call Input A and Input B.
The duty rates on Product No. 1, Input A, and Input B are as follows:
Company No. 1 imports five hundred thousand ($500,000) dollars worth of Input A and five hundred thousand ($500,000) dollars worth of Input B, for a total import value of one million ($1,000,000) dollars
Operating outside of FTZ No. 79, Company No. 1 must pay one hundred thousand ($100,000) dollars in combined duties for Inputs A & B in order to manufacture Product No. 1
If Company No. 1 was operating in an FTZ No. 79 Zone Site, Company No. 1 would be able to import both Inputs A & B into an FTZ No. 79 Zone Site and manufacture Product No. 1 within the FTZ No. 79 Zone Site without paying the required one hundred thousand ($100,000) dollars in duties.
Once the manufacturing process of Product No. 1 is complete, Company No. 1 can withdraw Product No. 1 from the FTZ No. 79 Zone Site and formally enter Product No. 1 into the Customs Territory of the United States.
Company No. 1 will pay zero ($0) dollars in duties--a savings of $100,000 and product No. 1 will enter the United States duty free.
Companies operating as an FTZ No. 79 Zone Operator can qualify for the weekly entry program. Under this situation, if a company has multiple importations per week, the company may file only one entry per week to cover all the individual importations over that one week span. This allows a company to submit one formal entry and be liable for payment of the merchandise processing fee on that one entry versus on multiple entries. See the following example.
Over the course of one calendar year Company No. 1 imports Product No. 1 two-times a week and submits the required paperwork for the two entries every week. The total value of the imported merchandise over one calendar year is $14,560,000.
Operating outside FTZ No. 79, Company No. 1 is liable for a merchandise processing fee of approximately $50,400 for the imported merchandise.
If Company No. 1 was operating in an FTZ No. 79 Zone Site, it would be able to submit paperwork once per week for both the entries. Instead of paying approximately $50,400 in merchandise processing fees, Company No. 1 would pay approximately $25,200--a 50% savings.
Do you want specifics as to how FTZ No. 79 can help your business?
These are just three examples as to how FTZ No. 79 can help your business. For specific information about how FTZ No. 79 can help your business, contact us now.
