Foreign Trade Zone (FTZ)

Category: Federal Incentives, Trade Zones

These zones are secure areas under U.S. Customs and Border Protection (CBP) supervision that are located in or near CBP ports of entry - like the Port of Stockton. While in the zone, merchandise is not subject to U.S. duty or excise tax. Certain tangible personal property is generally exempt from state and local ad valorem taxes. Goods may be exported from the zone free of duty and excise tax. Merchandise may remain in a zone indefinitley, whether or not subject to duty. Foreign and domestic goods held for export are exempt from state and local inventory taxes. The FTZ program encourages U.S.-based operations by removing certain disincentives associated with manufacturing in the United States.