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Airport

The lobby of the Casper/Natrona County International Airport is pictured in June. A foreign trade zone at the airport has been expanded to encompass most of Natrona County. 

There has been much talk about how to draw more economic development to the Casper area. Local officials have been working for years to figure out how to build a hotel and conference center in the city. Economic development experts are hoping to entice aerospace and defense companies to set up shop here. And earlier this month, U.S. Sen. John Barasso and Rep. Liz Cheney were in town to discuss how to leverage the tax-incentivized opportunity zones in the city.

Amid those talks, Natrona County Commissioner Rob Hendry pitched another idea: leverage our foreign trade zone to bring more investment to the area.

But few even know that a foreign trade zone exists in Natrona County. We broke down what that program is and how it might accomplish the overall goal of economic development.

What is a Foreign Trade Zone?

A foreign trade zone is a federally-designated geographical area where businesses can essentially operate outside of U.S. commerce. That means they can defer, or in some cases avoid altogether, duties and taxes on their products.

The program is run by the U.S. Department of Commerce and the Treasury Department. It’s tied to Customs and Border Protection because it allows companies to technically operate outside of U.S. Customs. There are zones in all 50 states and Puerto Rico.

A variety of industries — from pharmaceuticals and textiles to aerospace and defense — have benefited from using the zones, according to The National Association of Foreign-Trade Zones. Shipments into these zones were worth nearly $670 billion in 2017.

The program is nearly a century old, but it’s been modified over time. The Natrona County airport only recently expanded its zone to cover the entire county.

So, it means these companies aren’t paying taxes?

Yes and no. If you’re a company operating inside one of these zones, you can get around inverted tariffs (a bike tire having a higher tariff than an entire bike, for example). But you can also defer duties and tariffs while merchandise is inside a zone.

Say you’re a car manufacturer importing sheets of aluminum. If you’re inside a foreign trade zone, you don’t have to pay any taxes on that imported aluminum as long as the sheets remain in the zone.

You take the aluminum, build your car, then ship it to another country. Unless that country is Mexico or Canada, you won’t have paid any U.S. taxes on that initial import. But even if you’re selling that car in the U.S., you won’t pay the tax on the aluminum import at all. Rather, you would pay the tax on the car, and only the car, and not until it leaves the zone. Meaning money that otherwise would be tied up in customs can be spent on, well, more aluminum.

In some cases, you’ll still pay the tax, but you won’t have to pay it right away and it might be less than it would have been. In other cases, you could avoid the tax altogether.

Why is this good for the communities these zones reside in?

That’s kind of a loaded question. Many would say they’re good because they spur investment. But it is a tax break for already wealthy corporations, and such tax incentives are often controversial.

Still, the zones have seen a lot of success, according to Erik Autor, president of the National Association of Foreign-Trade Zones. Autor said the zones are a way for localities to attract investment in their communities. He pointed to Spartanburg, South Carolina, which lured a BMW plant using its foreign trade zone designation, and Huntsville, Alabama, where Mazda and Toyota announced a joint plant last year.

But just because a community has a zone doesn’t mean it will be an automatic boom to the economy.

“This isn’t a situation where it’s build it and they will come,” he said. “Grantees really need to market their zones.”

What does this mean for Natrona County?

The Casper/Natrona County International Airport has been a designated foreign-trade zone since 1989, but the zone only included the airport. And it wasn’t realistic for other businesses to set up shop in the airport lobby.

Last year, under a plan called the Alternative Site Framework, the airport expanded the reach of the zone, and now nearly all of Natrona County is within its boundaries. That means any company already operating in the county could apply through the airport for the benefits foreign trade zones offer.

That doesn’t mean every company is going to, or is going to know they can, Natrona County airport executive director Glenn Januska said.

“This is a tool in the toolbox that we think is available for attracting businesses,” Januska said. “But it’s either going to benefit a company or it’s not.”

So far no businesses have applied. Januska said what they’re focusing on now is education.

“It’s something that’s offered in Natrona County that’s not offered anywhere else in Wyoming,” he said.

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Follow city reporter Morgan Hughes on Twitter @morganhwrites.

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Local Government Reporter

Morgan Hughes primarily covers local government. After growing up in rural Wisconsin, she graduated from Marquette University in 2018. She moved to Wyoming shortly after and covered education in Cheyenne before joining the Star-Tribune in May 2019.

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