Denton, Texas – Mike Sutphin, Vice President & General Manager of Avionics International Supply, Inc. (AIS) announced today that the US Customs and Border Protection has granted activation to the AIS facility located at 1750 Westcourt Road in Denton Texas as a general purpose zone under Foreign-Trade Zone #168 (FTZ 168). A variety of activities may take place in the zone, including assembling, packaging, destroying, storing, cleaning, exhibiting, re-packing, distributing, sorting, grading, testing, labeling, repairing, combining with foreign or domestic content, or processing. The FTZ is especially useful to firms that import components in order to manufacture finished products for exports. There is no time limit on how long goods may be stored in a FTZ.
Mr. Sutphin states; “Expanding the AIS services to our international and domestic suppliers and customers through the foreign-trade zone is an important tool in facilitating international trade. This expansion will encourage auxiliary business development because FTZs are considered to be outside of U.S. customs territory for the purpose of customs duty payment. Goods entering FTZs are not subject to customs tariffs until the goods leave the zone and are formally entered into customs territory. Merchandise that is shipped to foreign countries from FTZs is exempt from duty payments.”
Obtaining the FTZ has been a combined effort of AIS and The Denton County Economic Development Partnership, Denton Airport and Denton Chamber of Commerce. After almost three years of work the FTZ is now operational and additional businesses should be attracted to the advantages of operating in the FTZ, which will bring additional jobs to the area.
ADVANTAGES OF A FOREIGN TRADE ZONE
SAVINGS ON TAXES: Inventory held inside the FTZ is not subject to the standard “Inventory Taxes” associated with the local City, County and School District.
DUTY EXEMPTION ON RE-EXPORTS: If merchandise is re-exported after being placed in a FTZ or shipped to another FTZ and then re-exported then no duty is ever paid.
RELIEF FROM INVERTED TARIFFS: Generally, if foreign merchandise is brought into a Foreign-Trade Zone or Subzone and manufactured into a product that carries a lower duty rate, then the lower rate applies.
DUTY ELIMINATION ON WASTE AND SCRAP: No duty is charged on most waste and scrap from production in Foreign-Trade Zones.
NO DUTY ON REJECTED OR DEFECTIVE PARTS: Merchandise found to be defective or faulty, may be returned to the country of origin for repair or simply destroyed. Whichever choice is taken, no duty is paid. Many companies suffer from the "double duty crunch." That is, they pay duty on imported merchandise, find it to be faulty and return it to the country of origin for repair, and then pay duty again when the merchandise reenters the United States. If you are a Foreign-Trade Zone user or Subzone, the "double duty crunch" is never a problem, because your merchandise never enters the commerce of the United States.
DUTY DEFERRAL: No duty is ever charged on merchandise while it is in a Foreign Trade Zone, and there is no limit on the length of time merchandise may be kept in a Foreign-Trade Zone. By deferring the duty, capital is freed for more important needs.
NO DUTY ON DOMESTIC CONTENT OR VALUE ADDED: The "value added" to a product in a FTZ (including manufacture using domestic parts, cost of labor, overhead, and profit) is not included in its dutiable value when the final product leaves the Zone. Final duties are assessed on foreign content only.
RELIEF FROM LOCAL AD VALOREM TAXES: Foreign merchandise stored in Foreign-Trade Zones, or merchandise held in a zone for export, is not subject to any state or local ad valorem taxes.
NO DUTY ON SALES TO THE U.S. MILITARY OR NASA: No duty is charged on merchandise sold from a Foreign-Trade Zone to the U.S. Military or NASA, returned to the country of origin for repair or simply destroyed. Whichever choice is taken, no duty is paid.
