Final answer:
People can defer payment of duty on imported goods through Bonded Warehousing, Foreign Trade Zones, and Inward Processing Relief, which allow duties to be delayed until goods are consumed domestically or exported.
Step-by-step explanation:
There are three ways people can delay or defer payment of duty on imported goods:
- Bonded Warehousing: This is where imported goods are stored in a government-authorized warehouse and duties are deferred until the goods are removed for domestic consumption. During storage, the goods may be manipulated by cleaning, sorting, repacking, or otherwise changing their condition without paying duties.
- Foreign Trade Zones: These are secure areas under U.S. Customs and Border Protection (CBP) supervision that are generally considered outside of CBP territory upon activation. Duties and taxes are deferred on goods until they enter for domestic consumption, which can encourage international trade and economic activity.
- Inward Processing Relief: This allows companies to import goods for manufacturing or repair purposes, process them, and then export them without paying duties. If the finished product is sold domestically, the duties are then paid.
By utilizing these methods, businesses can manage cash flow more effectively, as they do not need to pay duties upfront.