1. E XPLORING THE P OSSIBILITIES : F OREIGN T RADE Z ONES Joe Kiely, Town of Limon

2. What is an FTZ? What Are the Benefits a Company Locating in Colorado? What are the Local Benefits? A Look at Colorados International Trade Do FTZs exist in Colorado? An Invitation to Be Included in the Service Area

3. The Foreign-Trade Zone Program was created by the U.S. government to facilitate international trade and increase the global competitiveness of U.S.-based companies. The program, which has existed since the 1930s, continues to thrive and change to better meet the needs of American companies in the global economy. What Is a Foreign Trade Zone?

4. An FTZ is an area within the United States, in or near a U.S. Customs port of entry, where foreign and domestic merchandise is considered to be outside the country, or at least, outside of U.S. Customs territory. Customs duties and excise taxes are due only at the time of transfer from the FTZ for U.S. consumption. If the merchandise never enters the U.S. commerce, then no duties or taxes are paid on those items.

5. FTZs are designated sites licensed by the FTZ Board (Commerce Secretary is Chairperson) at which special CBP procedures may be used. A site which has been granted zone status may not be used for zone activity until the site or a section thereof has been separately approved for FTZ activation by local CBP officials.

8. Duty Deferral Goods imported into the U.S. are subject to duty paid through the U.S. Customs and Border Protection (CBP). FTZs affect the timing of the duty payment. If a product or good is moved into the U.S. outside an FTZ, duty is due upon arrival in the U.S. If the same product or good is moved into an FTZ, the duty is deferred as long as the product or good remains in the FTZ. The good can be moved from one FTZ to another FTZ and the duty is still deferred. Company Benefits

9. Federal income taxes are unchanged. All other federal regulations apply. Inverted Duty for Manufactured Products When components of a final product come together in a final product, instead of duty being paid at the rate due on each component, the duty is paid only upon the final product and at a lower rate.

10. Avoid Personal Property Tax Products or goods stored in an FTZ are not subject to inventory tax, i.e. personal property taxes. Local government may require payment in Lieu of Taxes Marketing The business may benefit from having a presence in the U.S.

11. Increased Real Property Taxes While the goods stored in an FTZ are exempt from personal property taxes, facilities within an FTZ are subject to real property taxes.. Local Benefits

12. Increased Jobs FTZs have a multiplier effect on local employment. Job creation follows a wide range of FTZ activities assembly, manufacturing and distribution.

13. Marketing An FTZ provides another reason to do business within and with this area. U.S. Subsidiaries of Global Companies Play a Vital Role in Colorados Economy U.S. subsidiaries own over $28 billion in gross property, plant and equipment. U.S. subsidiaries own $2.5 billion in commercial property in Colorado. U.S. subsidiaries announced 14 Greenfield projects in Colorado in 2010, creating an estimated 2,587 new jobs.

14. Colorado Trade

16. Today, the bulk of U.S. FTZ activity occurs in subzones. Subzones, which carry all zone benefits, consist of a site or sites that are designed for a specific company or use for either warehousing or manufacturing. They account for 85% of all merchandise received in zones and 74% of all zone exports. … U.S. Foreign Trade Zones: Background and Issues for Congress

17. Colorado Springs FTZ #112 Colorado Springs Foreign Trade Zone, Inc. No Activity. Colorado FTZs

18. Denver FTZ No. 123 City and County of Denver 2012 Currently 1 Companies 100% Oil/Petroleum Vestas… application for Subzones Pillow Kingdom … application for Subzone

19. Marketing An FTZ provides another reason to do business within and with this area. U.S. Subsidiaries of Global Companies Play a Vital Role in Colorados Economy U.S. subsidiaries own over $28 billion in gross property, plant and equipment. U.S. subsidiaries own $2.5 billion in commercial property in Colorado. U.S. subsidiaries announced 14 Greenfield projects in Colorado in 2010, creating an estimated 2,587 new jobs.

20. Proposed Service Area

21. Why be included in Service Area? Allows quicker response to potential clients Inclusion in Service Area makes getting a sub-zone a shorter process Strengthens the Regional Economy!

22. Would You Provide a Letter of Support for Our Application to the FTZ Board?

23. Q UESTIONS ?