SALT LAKE CITY, Utah(News4Utah) A new status could be a big boost for key businesses in Salt Lake City. Ben Kolendar, Deputy Director of the Salt Lake City Department of Economic Development, joined Brian Carlson, to help us understand what it means for all of you.
Kolendar says foreign trade zones work by being a type of customs limbo. Foreign and domestic companies that import goods into a zone, can delay paying duties until the goods leave the zone. Manufacturers can choose whether to pay duties on their imported components or on their final product, and don’t have to pay duties on imported goods that are later re-exported.
As a manufacturer or distributor, you could save hundreds of thousands of dollars by deferring or even eliminating having to pay those taxes
Salt Lake City’s new Alternative Site Framework now provides benefits to any company within a 60-mile radius of their FTZ which is located near the Salt Lake City International Airport. This area encompasses all of Salt Lake, Utah, Davis, Weber and Morgan Counties, as well as parts of Box Elder, Summit and Tooele Counties. This ASF allows any company located within the service area to secure Foreign-Trade Zone status for warehousing and distribution operations within approximately 30 days from the time an application is accepted for filing. The previous model took up to a year.
There is a lot of talk in the national news about trade barriers. An FTZ could potentially take those barriers down. Kolendar says that regardless of what happens, a business can save up to hundreds of thousands in taxes by using an FTZ zone.
The FTZ has another potential benefit if the current administration chooses to scrap longtime free trade agreements. The Foreign Trade Zone program was created during the Great Depression to help companies compete with overseas rivals in an era of high tariffs. Unlike free trade zones overseas, which usually have a geographic boundary near a port or city, U.S. foreign trade zones and subzones can be anywhere
If we are ever faced with a trade war, an FTZ zone helps Northern Utah companies compete with international rivals
Kolendar says there is no cost for your company to join an FTZ. It is recommended for participants to import at least $1-million in goods to offset the price associated with joining an FTZ. A handful of Utah companies are taking advantage of it, and savings have exceeded their expectations.
For more information, please visit SLCGov.com.