On May 12, 2012, the U.S. Department of Commerce granted the Caldwell Economic Development Council (CEDC) the authority to establish and administer the Foreign Trade Zone #280 under the Alternative Site Framework.
The new FTZ provides exciting and significant benefits to both businesses and the community at large, and will prove to make a major impact on the commerce and development of southwest Idaho.
The FTZ stimulates economic growth and development through job retention and creation. The program provides incentives for companies to establish or expand operations.
- Help facilitate and expedite international trade.
- Provide special customs procedures as a public service to help firms conduct international trade related operations in competition with foreign plants.
- Encourage and facilitate exports.
- Help attract offshore activity and encourage retention of domestic activity.
- Assist state/local economic development efforts.
- Help create employment opportunities.
WHAT IS A FOREIGN-TRADE ZONE?
A foreign-trade zone is a designated site licensed by the Foreign-Trade Zones (FTZ) Board at which special customs procedures may be used.
These procedures allow domestic activity involving foreign items to take place prior to 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 producers located in the United States.
FTZ sites and facilities remain within the jurisdiction of local, state or federal governments or agencies.
The CEDC Foreign-Trade Zone enables companies to save money on imported merchandise by diminishing import duties, as well as streamline formal customs entry procedures.
FTZ provides incentives to companies and facilitates the application process and program involvement.
FTZ’s facilitate trade and increase the global competitiveness of companies doing business in the Treasure Valley by reducing operating costs associated with international trade.
Businesses lower costs by deferring or reducing customs duties on imported goods, by realizing distribution savings, by streamlining processing of goods and eliminating quota restrictions. As a result, Idaho companies are better able to compete with foreign manufacturers.
- Duty Exemption. No duties on or quota charges on re-exports.
- Duty Deferral. Customs duties and federal excise tax deferred on imports.
- Reduced Merchandise Processing Fees. Maximum payment of $485 filed weekly versus 0.21% of the total value of each shipment filed individually.
- Inverted Tariff. In situations where zone manufacturing 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.
- Logistical Benefits. Companies using FTZ procedures may have access to streamlined customs procedures (e.g. “weekly entry” or “direct delivery”).
- Other Benefits. Foreign goods and domestic goods held for export are exempt from state/local inventory taxes. FTZ status may also make a site eligible for state/ local benefits which are unrelated to the FTZ Act.