The North American Industry Classification System (NAICS) is used by the United States, Mexico, and Canada to help identify industry performance and forecast economic conditions.
NAICS
The NAICS is an abbreviation of the North American Industry Classification System. The NAICS are standard codes assigned to business sectors and industries that can be used for statistical purposes in classifying businesses for collecting, analyzing, and publishing data related to the United States economy.
NAICS history
NAICS was adopted in 1997 to replace the Standard Industrial Classification (SIC) system. This was a joint effort between the United States, Mexico, and Canada to allow for better comparability in business statistics among the North American countries.
Finding your NAICS code
To find and assign a NAICS code, start by identifying your primary business activity.
Visit the official NAICS website (https://www.census.gov/naics/) and use the search function to enter keywords related to your business.
You can search for your business NAICS code by entering keywords or the 2-6 digit code.
Review the descriptions of the resulting codes to find the one that best matches your business operations.
Once identified, document this NAICS code in your records for your information and add it to Fingercheck. Assigning the correct NAICS code in Fingercheck ensures accurate industry classification, which is essential for compliance, reporting, and statistical analysis.
You must provide your NAICS code. We do not have enough information to find and offer you your company's NAICS code.
Why do I need a NAICS code?
A NAICS code is necessary for several reasons:
Standardization: It provides a standardized way to classify businesses and industries across North America, ensuring consistency in data collection and analysis.
Government Reporting: Many government agencies use NAICS codes to collect, analyze, and publish statistical data related to the U.S. economy. Businesses need these codes for various reporting requirements.
Tax Purposes: The Internal Revenue Service (IRS) and other tax authorities use NAICS codes to determine eligibility for certain tax benefits and to apply appropriate tax rules.
Regulatory Compliance: Some regulations and compliance requirements are industry-specific. NAICS codes help businesses ensure they are following the correct rules and regulations for their industry.
Market Research: Companies use NAICS codes for market research and analysis to understand industry trends, size, and competition.
Contracting and Procurement: Government contracts and procurement processes often require businesses to have a NAICS code to qualify for certain contracts or grants.
Funding and Grants: Many funding agencies and grant programs use NAICS codes to determine eligibility and to allocate resources appropriately.
By using NAICS codes, businesses can ensure they are accurately classified, which is essential for various administrative, compliance, and strategic purposes.
Do NAICS codes change?
Yes, NAICS codes change every five years. 2022 was the last year the NAICS codes were reviewed and changed. During this time codes and existing codes may be amended, as well as new codes added.
You can still review previous NAICS codes at the US Census website.
NAICS classification
The NAICS code can be 5 or 6 digits. The first 5 digits of the NAICS code are standard reporting in the United States, Mexico, and Canada. NAICS codes having 6 digits means one of the three countries will use the last digit for their own use when compiling and reporting data.
The NAICS classification:
Sector: 2-digit code
Subsector: 3-digit code
Industry Group: 4-digit code
NAICS Industry: 5-digit code
National Industry: 6-digit code
FAQ
What is NAICS?
NAICS, or the North American Industry Classification System, is a standardized system used for classifying business establishments based on their primary economic activities. It provides a consistent framework for statistical analysis and reporting.
Why is NAICS important?
NAICS is essential for data collection, analysis, and reporting across different industries. It enables businesses, policymakers, and researchers to understand economic trends, make informed decisions, and conduct accurate statistical comparisons.
How is NAICS different from SIC?
NAICS differs from the Standard Industrial Classification (SIC) system because of its ability to adapt to changes in the economy and industries. NAICS is more detailed and flexible, allowing for a more accurate classification of businesses based on their activities.
How is the NAICS code assigned?
Businesses are assigned a NAICS code based on the primary economic activity they engage in. The code is determined by the nature of the goods or services they provide.
Can a business have multiple NAICS codes?
Yes, a business can have multiple NAICS codes if it engages in different business activities, such as selling multiple products and services. This allows for a more accurate representation of the diverse activities a business may undertake.
Why is NAICS important for government contracting?
NAICS codes are crucial for government contracting as they help identify businesses eligible for specific contracts. Government agencies use NAICS codes to streamline the procurement process and ensure contracts are awarded to businesses in relevant industries.
How often are NAICS codes updated?
NAICS codes are updated periodically to reflect changes in the economy and emerging industries. The updates ensure that the classification system remains current and relevant.
Can a business change its NAICS code?
Yes, a business can change its NAICS code if there is a significant shift in its primary economic activities. However, it's essential to consult with relevant authorities and update official records accordingly.
These FAQs offer general information about NAICS, and businesses are encouraged to refer to official documentation and authorities for specific details and guidance.
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