Zone status provides the opportunity to reduce certain domestic operating costs that are not incurred if operating from a foreign state. No U.S. duty is assessed when exporting goods from the zone. Processing goods within the zone can eliminate or lower tariffs. Duties can be avoided on defective or damaged goods by inspecting and testing imported goods within a zone. Savings may be realized in transport insurance.
Inventory stored in a Foreign Trade Zone is exempt from local property tax.
In most instances, a taxpayer may determine the exemption by applying the percentage of that location's total shipments which went out of state during the previous year. There are four basic provisions within the statutes that contain the eligibility requirements for the exemption of goods considered to be in interstate commerce. The property is owned by a manufacturer or processor. The origin of the goods is either in state or out of state. Allocation method is based on previous year.