Kyle council allows company’s Foreign Trade Zone application to move forward

If granted the FTZ distinction, ENF would not be exempt from normal city or county taxation, according to agenda documents.

An FTZ designation would save the company approximately $300,000 in tariff duties each year, according to agenda documents, depending on factors including:

• Volume of imports
• Mix of products
• Tariff rates
• Overall production at the facility

ENF has invested heavily in machinery and equipment at the Kyle site, according to agenda documents. The company has the opportunity to expand within the region’s growing semiconductor supply chain.

If approved, the company’s FTZ participation could reduce local inventory-related property tax revenues to the city. City staff proposed a Payment in Lieu of Taxes, or PILOT, agreement to ensure Kyle does not lose property tax revenue.

The proposed PILOT agreement would have required the company to make annual payments to the city equivalent to what would have been owed in inventory property taxes if not for the FTZ distinction.

The City Council voted to allow PILOT agreement negotiations between the city and ENF.

The agreement will be brought to the council for final review and approval at a future meeting.