Your business has at least one primary North American Industry Classification System (NAICS) code, and possibly a secondary code as well. How confident are you that your company is reporting the correct NAICS code when required, and why should you care?
Well, your NAICS code is used by your health insurance carrier, your worker’s comp carrier, and other business-related insurance firms to identify your business type, calculate the related risk, and set premiums accordingly. It is used by the IRS to make decisions about your tax returns. For example, if your NAICS code is wrong and the IRS thinks your deductions aren’t like others in your industry, you might have a higher chance of being audited. Finally, your NAICS code is often times used in the financial industry to compare your business to other similar types of businesses. An incorrect code puts you at risk of financial comparative analysis against the wrong type of industry, potentially affecting lending decisions.
So, what is an NAICS code anyway? The NAICS code is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. NAICS was developed under the auspices of the Office of Management and Budget (OMB), and adopted in 1997 to replace the Standard Industrial Classification (SIC) system. It was developed jointly by the United States, Canada and Mexico to allow for a high level of comparability in business statistics among the North American countries.
An establishment is typically a single physical location, though administratively distinct operations at a single location may be treated as distinct establishments. Each establishment is classified to an industry according to the primary business activity taking place there. A business will generally have a primary NAICS code, but it can also have multiple NAICS codes if it sells multiple products and services. NAICS does not offer guidance on the classification of enterprises (companies) which are composed of multiple establishments.
There is no central government agency with the role of assigning, monitoring, or approving NAICS codes for establishments. Individual establishments are assigned NAICS codes by various agencies for various purposes using a variety of methods.
For example, the U.S. Census Bureau assigns one NAICS code to each establishment based on its primary activity (generally the activity that generates the most revenue for the establishment). Generally, the U.S. Census Bureau's NAICS classification codes are derived from information that the business establishment provided on surveys, census forms, or administrative records.
There is no "official" way to have a company's NAICS code changed, and there is no central register that represents the "official" NAICS classification for business establishments. There also is no formal arbitrator of NAICS code disputes.
You should review your NAICS codes for your business periodically and compare them with the official NAICS manual to ensure their accuracy. If you question the NAICS code contained on a form received from a governmental agency, you should contact that agency directly. For example, if you question the NAICS code contained on a form received from the Occupational Safety and Health Administration (OSHA), you should contact the Department of Labor.
The official 2017 U.S. NAICS Manual includes definitions for each industry, background information, and a comprehensive index. The manual is available to for free at: https://www.census.gov/eos/www/naics/2017NAICS/2017_NAICS_Manual.pdf
Below is a list of the most commonly used NAICS codes for the U.S. foundry industry:
331314 - Secondary Smelting and Alloying of Aluminum
331410 - Nonferrous Metal (except aluminum) Smelting and Refining
331492 - Secondary Smelting, Refining and Alloying of Nonferrous Metals (except copper and aluminum)
33151 - Ferrous Metal Foundries
331511 - Iron Foundries
331512 - Steel Investment Foundries
331513 - Steel Foundries (except Investment)
33152 - Nonferrous Metal Foundries
331523 - Nonferrous Metal Die-Casting Foundries
331524 - Aluminum Foundries (except Die-Casting)
331529 - Other Nonferrous Metal Foundries (except Die-Casting)