Normally, every business should have a principal business code for filing federal business tax profits and also for other U.S. government identification functions. This six-digit code number explains the kinds of products or services you sell, who you sell to, and the industry you are in. actually, the principal business code of a business is fully based on the business performance that produces the most income. The basic business activity is decided via the virtual share of production prices or by principal investment. This is also called the Professional Activity code.
Key Takeaways
- The principal business codes include the service and technology industry codes
- The principal business codes are mainly used as the general business identifiers for NAFTA
- The Census Bureau and the IRS can use the principal business codes for statistical purposes
- The principal business code of your business is needed on all business tax returns
How The Principal Business Codes Are Established?
The principal business codes are fully based on the North American Industry Classification System, NAICS. It normally includes the service and technology industry codes and also it was created to use the general business identifiers for NAFTA, i.e. the North American Free Trade Agreement between Canada, the U.S., and Mexico. In such a system, these identifiers are updated every few years.
How To Use The Principal Business Code?
The Census Bureau and the IRS can both utilize this code for statistical purposes. Here, the U.S. Census Bureau utilizes the PBC for gathering, investigating, and publishing statistical information related to the U.S. business economy. The IRS utilizes the information about businesses to compare revenue and also looks for businesses that have differences from a standard.
The SBA, i.e. Small Business Administration has a standard size for small businesses, which determines whether the business is eligible as a small business for SBA loan assurance purposes. This SBA also associates the principal business codes for every industry to the size of the business with respect to either average employment or annual receipts.
How To Identify Your Company’s Principal Business Code?
Identifying your company’s PBC is more complex than it may look. Even some of the businesses obviously suit into a category, while the others are not as evident; because it is impossible to add each single business form in a classification system. You may also have to look a while to come up with the perfect robust category.
Being by discovering the subcategory or common industry category for your business, the industries are listed alphabetically. The wholesale, retail and other service industries are listed individually.
Within that common category or industry, you just simply discover the description that best suits your business. It may also be something unpredicted. In some cases, there is not a certain category of business that matches what you are performing. In such a case, you just look for all other or non-certain categories inside your common industry.
If you cannot even identify your business code in a scientific, professional and technical services category, you may want to use 541990 for all other scientific, professional, and technical services.
Principal Business Code On Your Business Tax Return
The principal business code of your business is needed on all business tax returns. If you have many sources of income inside your business, you can simply enter the one that takes in many revenues. If you have more than one business, you should enter an individual tax return for each one.
Magalie D. is a Diploma holder in Public Administration & Management from the McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company in Toronto.
List Of IRS Principal Business Activity Codes
NAICS based principal Business Code according to classified business activity as below. The first column is for codes and the second column is for principal business description name.
| Codes | Business |
| Agriculture, Forestry, and Fishing | |
| Crop production | |
| 111100 | Oilseed and grain farming |
| 111210 | Vegetable and melon farming |
| 111300 | Fruit and tree nut farming |
| 111400 | Greenhouse, nursery and floriculture production |
| 111900 | Other crop farming (tobacco, cotton, etc.) |
| Animal production | |
| 112111 | Beef cattle ranching and farming |
| 112112 | Cattle feedlots |
| 112120 | Dairy cattle and milk production |
| 112210 | Hog and pig farming |
| 112300 | Poultry and egg production |
| 112400 | Sheep and goat farming |
| 112510 | Animal aquaculture |
| 112900 | Other animal production |
| Forestry and logging | |
| 113110 | Timber tract operations |
| 113210 | Forest nurseries and gathering of forest products |
| 113310 | Logging |
| Fishing, hunting and trapping | |
| 114110 | Fishing |
| 114210 | Hunting and trapping |
| Support activities for agriculture and forestry | |
| 115110 | Support activities for crop production |
| 115210 | Support activities for animal production |
| 115310 | Support activities for forestry |
| Mining | |
| 211110 | Oil and gas extraction |
| 212110 | Coal mining |
| 212200 | Metal ore mining |
| 212310 | Stone mining and quarrying |
| 212320 | Sand, gravel, clay, etc. mining and quarrying |
| 212390 | Other nonmetallic mineral mining and quarrying |
| 213110 | Support activities for mining |
| Utilities | |
| 221100 | Electric power generation, transmission and distribution |
| 221210 | Natural gas distribution |
| 221300 | Water, sewage and other systems |
| Construction | |
| Construction of buildings | |
| 236110 | Residential building construction |
| 236200 | Nonresidential building construction |
| Heavy and civil engineering construction | |
| 237100 | Utility system construction |
| 237210 | Land subdivision |
| 237310 | Highway, street, and bridge construction |
| 237990 | Other heavy and civil engineering construction |
| Specialty trade contractors | |
| 238100 | Foundation, structure, and building exterior contractors |
| 238210 | Electrical contractors |
| 238220 | Plumbing, heating, and air |
| 238290 | Other building equipment contractors |
| 238300 | Building finishing contractors |
| 238900 | Other specialty trade contractors |
| Manufacturing | |
| Food manufacturing | |
| 311110 | Animal food |
| 311200 | Grain and oilseed milling |
| 311300 | Sugar and confectionery product |
| 311400 | Fruit and vegetable preserving and specialty |
| 311500 | Dairy product |
| 311610 | Animal slaughtering and processing |
| 311710 | Seafood product prep and packaging |
| 311800 | Bakeries and tortilla |
| 311900 | Other food (coffee, tea, etc.) |
| Beverage and tobacco product manufacturing | |
| 312110 | Soft drink and ice |
| 312120 | Breweries |
| 312130 | Wineries |
| 312140 | Distilleries |
| 312200 | Tobacco |
| Textile mills and textile product mills | |
| 313000 | Textile mills |
| 314000 | Textile product mills |
| Apparel manufacturing | |
| 315100 | Apparel knitting mills |
| 315210 | Cut and sew apparel contractors |
| 315220 | Men’s and boys’ cut and sew apparel |
| 315230 | Women’s and girls’ cut and sew apparel |
| 315290 | Other cut and sew apparel |
| 315990 | Apparel accessories and other apparel |
| Leather and allied product manufacturing | |
| 316110 | Leather and hide tanning and finishing |
| 316210 | Footwear |
| 316990 | Other leather and allied product |
| Wood product manufacturing | |
| 321110 | Sawmills and wood preservation |
| 321210 | Veneer, plywood and engineered wood products |
| 321900 | Other wood product |
| Paper manufacturing | |
| 322100 | Pulp, paper, paperboard mills |
| 322200 | Converted paper product |
| Printing and related support activities | |
| 323100 | Printing and related support activities |
| Petroleum and coal products manufacturing | |
| 324110 | Petroleum refineries |
| 324120 | Asphalt paving, roofing, saturated materials |
| 324190 | Other petroleum and coal products |
| Chemical manufacturing | |
| 325100 | Basic chemical |
| 325200 | Resin, synthetic rubber, etc. |
| 325300 | Pesticide, fertilizer, other agricultural chemicals |
| 325410 | Pharmaceuticals and medicine |
| 325500 | Paint, coating, adhesive |
| 325600 | Soap, cleaning compound, toilet prep |
| 325900 | Other chemical products and prep |
| Plastics and rubber products manufacturing | |
| 326100 | Plastics product |
| 326200 | Rubber product |
| Nonmetallic mineral product manufacturing | |
| 327100 | Clay product and refractory |
| 327210 | Glass and glass product |
| 327300 | Cement and concrete product |
| 327400 | Lime and gypsum product |
| 327900 | Other nonmetallic mineral product |
| Primary metal manufacturing | |
| 331110 | Iron and steel mills and ferroalloy |
| 331200 | Steel product from purchased steel |
| 331310 | Alumina and aluminum production and processing |
| 331400 | Nonferrous metals (except aluminum) |
| 331500 | Foundries |
| Fabricated metal product manufacturing | |
| 332110 | Forging and stamping |
| 332210 | Cutlery and hand tool |
| 332300 | Architectural and structural metals |
| 332400 | Boiler, tank, shipping container |
| 332510 | Hardware |
| 332610 | Spring and wire product |
| 332700 | Machine shops, turned production, screws, nuts, etc. |
| 332810 | Coating, engraving, heat treating, etc. |
| 332900 | Other fabricated metal product |
| Machinery manufacturing | |
| 333100 | Agriculture, construction, and mining machinery |
| 333200 | Industrial machinery |
| 333310 | Commercial and service industry machinery |
| 333410 | Ventilation, heating, air |
| 333510 | Metalworking machinery |
| 333610 | Engine, turbine, power transmission equipment |
| 333900 | Other general |
| Computer and electronic product manufacturing | |
| 334110 | Computer and peripheral equipment |
| 334200 | Communications equipment |
| 334310 | Audio and video equipment |
| 334410 | Semiconductor and other electronic computer equipment |
| 334500 | Navigational, measuring, etc. instruments |
| 334610 | Manufacturing and reproducing magnetic and optical media |
| Electrical equipment, appliance, component manufacturing | |
| 335100 | Electric lighting equipment |
| 335200 | Household appliance |
| 335310 | Electrical equipment |
| 335900 | Other electrical equipment and component |
| Transportation equipment manufacturing | |
| 336100 | Motor vehicle |
| 336210 | Motor vehicle body and trailer |
| 336300 | Motor vehicle parts |
| 336410 | Aerospace product and parts |
| 336510 | Railroad rolling stock |
| 336610 | Ship and boat building |
| 336990 | Other transportation equipment |
| Furniture and related product manufacturing | |
| 337000 | Furniture and related product |
| Miscellaneous manufacturing | |
| 339110 | Medical equipment and supplies |
| 339900 | Other miscellaneous manufacturing |
| Wholesale Trade | |
| Merchant wholesalers, durable goods | |
| 423100 | Motor vehicle, parts and supplies |
| 423200 | Furniture and home furnishing |
| 423300 | Lumber and other construction materials |
| 423400 | Professional and commercial equipment and supplies |
| 423500 | Metal and mineral (except petroleum) |
| 423600 | Electrical and electronic goods |
| 423700 | Hardware, plumbing and heating equipment |
| 423800 | Machinery, equipment and supplies |
| 423910 | Sporting and recreational goods and supplies |
| 423920 | Toy and hobby goods and supplies |
| 423930 | Recyclable material |
| 423940 | Jewelry, watch, precious stone, and precious metal |
| 423990 | Other miscellaneous durable goods |
| Merchant wholesalers, nondurable goods | |
| 424100 | Paper and paper product |
| 424210 | Drugs and druggists’ sundries |
| 424300 | Apparel, piece goods, and notions |
| 424400 | Grocery and related product |
| 424500 | Farm product raw material |
| 424600 | Chemical and allied products |
| 424700 | Petroleum and petroleum products |
| 424800 | Beer, wine, and distilled alcoholic beverage |
| 424910 | Farm supplies |
| 424920 | Book, periodical and newspaper |
| 424930 | Flower, nursery stock and florists’ supplies |
| 424940 | Tobacco and tobacco product |
| 424950 | Paint, varnish and supplies |
| 424990 | Other miscellaneous nondurable goods |
| Wholesale electronic markets and agents and brokers | |
| 425110 | Business |
| 425120 | Wholesale trade agents and brokers |
| Retail Trade | |
| Motor vehicle and parts dealers | |
| 441110 | New car dealers |
| 441120 | Used car dealers |
| 441210 | Recreational vehicle dealers |
| 441221 | Motorcycle dealers |
| 441222 | Boat dealers |
| 441229 | All other motor vehicle dealers |
| 441300 | Automotive parts, accessories, and tire stores |
| Furniture and home furnishings stores | |
| 442110 | Furniture stores |
| 442210 | Floor covering stores |
| 442291 | Window treatment stores |
| 442299 | All other home furnishings stores |
| Electronics and appliance stores | |
| 443111 | Household appliance stores |
| 443112 | Radio, television, and other electronics stores |
| 443120 | Computer and software stores |
| 443130 | Camera and photographic supplies stores |
| Building material and garden equipment and supplies dealers | |
| 444110 | Home centers |
| 444120 | Paint and wallpaper stores |
| 444130 | Hardware stores |
| 444190 | Other building material dealers |
| 444200 | Lawn and garden equipment and supplies stores |
| Food and beverage stores | |
| 445110 | Supermarkets and another grocery (except convenience) |
| 445120 | Convenience stores |
| 445210 | Meat markets |
| 445220 | Fish and seafood markets |
| 445230 | Fruit and vegetable markets |
| 445291 | Baked goods stores |
| 445292 | Confectionery and nut stores |
| 445299 | All other specialty food stores |
| 445310 | Beer, wine, liquor stores |
| Health and personal care stores | |
| 446110 | Pharmacies and drug stores |
| 446120 | Cosmetics, beauty supplies and perfume stores |
| 446130 | Optical goods stores |
| 446190 | Other health and personal care stores |
| Gasoline stations | |
| 447100 | Gasoline stations (including convenience stores w/gas) |
| Clothing and clothing accessories stores | |
| 448110 | Men’s clothing stores |
| 448120 | Women’s clothing stores |
| 448130 | Children’s and infants’ clothing stores |
| 448140 | Family clothing stores |
| 448150 | Clothing accessories stores |
| 448190 | Other clothing stores |
| 448210 | Shoe stores |
| 448310 | Jewelry stores |
| 448320 | Luggage and leather goods stores |
| Sporting goods, hobbies, book, and music stores | |
| 451110 | Sporting goods stores |
| 451120 | Hobby, toy, and game stores |
| 451130 | Sewing, needlework, and piece goods stores |
| 451140 | Musical instrument and supplies stores |
| 451211 | Book stores |
| 451212 | News dealers and newsstands |
| 451220 | Prerecorded tape, compact disc, and record stores |
| General merchandise stores | |
| 452110 | Department stores |
| 452900 | Other general merchandise stores |
| Miscellaneous store retailers | |
| 453110 | Florists |
| 453210 | Office supplies and stationery stores |
| 453220 | Gift, novelty and souvenir stores |
| 453310 | Used merchandise stores |
| 453910 | Pet and pet supplies stores |
| 453920 | Art dealers |
| 453930 | Manufactured (mobile) home dealers |
| 453990 | All other miscellaneous store retailers |
| Nonstore retailers | |
| 454110 | Electronic shopping and mail |
| 454210 | Vending machine operators |
| 454311 | Heating oil dealers |
| 454312 | Liquefied petroleum gas (bottled gas) dealers |
| 454319 | Other fuel dealers |
| 454390 | Other direct selling establishments |
These codes are also called IRS Business Codes that actually help the Internal Revenue Code Administration to process and manage the enterprises, sole proprietor, independent contractor, and other business owner’s tax return/income tax/expense (and other sectors) data in Canada, the USA, and Mexico.
Types Of PBC ( Primary Business Codes) and Business Tax Returns
A Schedule C Form is required if you own multiple sole proprietorships. Here you go to read the PDF from IRS Gov.
Here are the types to keep in mind –
1. Schedule C for sole proprietorships and single-member LLCs
2. U.S. Return of Partnership Income (Form 1065) for partnerships and multi-member LLCs
3. U.S. Corporation Income Tax Return (Form 1120) for C corporations
4. U.S. Income Tax Return for an S Corporation (Form 1120-S)
References
1. https://ttlc.intuit.com/community/business-taxes/discussion/where-do-i-find-a-principal-business-code-must-be-entered-schedule-c-is-asking-enter-a-valid-6-digit/00/674108
2. https://www.picnictax.com/blog/principal-business-codes-tax-guidelines-for-entrepreneurs/