Jan. 17, 2021
The North American Industry Classification System (NAICS) has been a topic of conversation on the American Rental Association’s (ARA) social media channels. ARA is providing the following summary to help bring some clarity on the NAICS code discussion.
NAICS was developed and adopted in 1997 as the standard by which federal statistical agencies classify businesses for the collection, analysis and publication of statistics related to the economy of the U.S. An example of such an agency would be the U.S. Census Bureau. Not many companies know about NAICS codes or how their business has been classified, since it’s probably never come up before. Check with your accountants and tax professionals.
The code associated with a business is supposed to represent its main line of business, the business from which it derives most of its revenues. According to census.gov, the codes are not assigned, but self-assigned and there is no central government agency responsible for assigning, monitoring, approving or changing NAICS codes.
The most frequently used NAICS codes in the equipment rental industry are:
- 532310 “General Rental Centers”, which include “party and banquet equipment and supplies”
- 532289 “All other consumer goods rental” which includes “party rental supply centers”
- 532412 “Construction, Mining and Forestry Machinery and Equipment Rental and Leasing”
The Census Bureau does gather additional information on businesses from information provided by the business on survey and census reports.
It is very likely that changing one’s NAICS code in order to qualify for additional Paycheck Protection Program (PPP) funds would be construed as fraud by the government.
“In our work in government affairs, we frequently use industry NAICS codes in crafting bills. This makes it easier for state and federal lawmakers to know exactly what industry we are advocating for and the type of equipment we are describing,” says Alysia Ryan, J.D., ARA’s director of state government affairs.
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