Foreign Trade Zone (FTZ) #272
A Foreign Trade Zone (FTZ) is a physical location within a United States customs territory, where merchandise receives the same treatment as if it were outside the commerce of the United States. This allows merchandise, while located in the FTZ, not to be subjected to customs duties and other tariff and taxes, enabling domestic manufacturers to import foreign-sourced parts or materials into the FTZ without being responsible for paying duties on them. They could then incorporate those parts or materials into their products, utilizing U.S. labor, and sell the part or materials in the domestic market, thus selecting whether to have the customs duty apply to the components or the finished product.
Distributors can also benefit as the FTZ allows for direct delivery from the ports into the zone, which can save time, money, and reduce customs processing fees. Merchandise can also be moved from one FTZ or another without being subject to customs duty via a process called Zone-to-Zone Transfer.