Foreign Trade Zones (FTZs) provide special customs procedures to U.S. plants engaged in international trade-related activities. Duty-free treatment is accorded items that are processed in FTZs and then reexp[orted, and duty payment is deferred on items until they are brought out of the FTZ for sale in the U.S. market which helps offset customs advantages available to overseas producers who compete with domestic industry.
In Arizona, A Zone that is approved and activated may be re-classified down from 20% tax valuation to 5% valuation resulting in the tax benefit of a 75% reduction.