NAICS Classification & Reference Center
The NAICS Classification & Reference Center is a governed reference hub for how to interpret and apply NAICS consistently at the establishment level. Use it to resolve boundary decisions (included vs excluded activities), validate hierarchy fit, apply stability controls, and manage revision-aware classification—then confirm final fit on individual NAICS code pages (example: 621111 — Offices of Physicians).
New to NAICS? Start with “What is a NAICS Code?” · Need to find a code quickly? Use the NAICS Directory · How to Choose the Correct NAICS Code
- What is a NAICS Code?
Canonical definition & structure (beginner-friendly). - NAICS Code Lookup / Directory
Search & browse to find codes quickly. - How to Choose the Correct NAICS Code
Practical selection guidance for common cases. - SIC vs NAICS
High-level comparison and when to use each.
Authority & governance signals
On this page
- Scope and principles
- Evidence inputs used for NAICS assignment
- Decision workflow (near-neighbor resolution)
- Methodology in action (examples + deep dive)
- Edge cases & complex scenarios
- Governance metrics (what to publish)
- Human review & governance boundaries
- Quality checks and explainability outputs
- Revision cycles & versioning (2017 vs 2022)
- When to defer to agency guidance
- Professional tools & resources
- FAQ
Principles
Scope and principles
This reference center is designed for consistent, establishment-level NAICS decisions. NAICS assignment is treated as a governed interpretation process—especially for multi-activity operations, ambiguous public descriptions, and near-neighbor codes with overlapping terminology.
Core principles
- Primary activity focus: assign based on the establishment’s dominant activity (commonly revenue when available).
- Hierarchy fit: validate parent structure (Sector → Subsector → Industry Group → Industry → National Industry).
- Boundary logic: resolve ambiguity using included vs excluded activities (not just code names).
- Stability controls: avoid churn; changes should reflect evidence, revision adoption, or error correction.
What this page is not
- Not a replacement for official NAICS publications.
- Not program eligibility guidance (procurement, licensing, grants, etc.).
- Not a keyword-only search interface (use the Directory for lookup).
New to NAICS? Start with the definition page.
Methodology
Evidence inputs used for NAICS assignment
NAICS classification is strongest when it is grounded in verifiable signals about what an establishment actually does. A governed approach can incorporate multiple evidence types, then validate the result against hierarchy and boundary rules.
Common evidence signals
- Primary activity statements (what is actually delivered)
- Products/services offered and operational keywords
- Delivery model (manufacture vs wholesale vs retail vs service)
- Customer type and revenue model indicators (when available)
Reference anchoring (why 6 digits matter)
- Most boundary decisions happen at the 6-digit National Industry level.
- Adjacent-code confusion often begins at 3–5 digits and must be corrected by hierarchy fit checks.
- Included vs excluded logic reduces “name match” errors.
Correct vs. drift (quick example)
CorrectManufacturing when the establishment primarily produces goods (value-adding production).
Drift errorKeyword match (“pump”) forces Manufacturing, but the establishment primarily distributes pumps (Wholesale) or installs pumps (Construction).
Decision flow
Decision workflow (near-neighbor resolution)
Many establishments appear to match multiple NAICS codes. When ambiguity exists, the resolution process should be explicit, repeatable, and stable across time.
Rule of thumb: choose the code that best fits the establishment’s primary revenue-generating activity and the most specific NAICS definition whose boundaries match observed operations.
Resolution workflow
- Generate candidates: shortlist likely codes based on activity evidence (not branding).
- Validate hierarchy: confirm parent structure fit (sector/subsector alignment).
- Confirm boundaries: verify included vs excluded activities on the code page.
- Select specificity: choose the most specific defensible 6-digit code.
- Document why-not: record why adjacent candidates were rejected (prevents churn).
Deep dive: determining “primary activity” when revenue is unknown
When revenue share is unavailable, use consistent proxies so decisions remain repeatable across similar establishments.
- Labor/time proxy: greatest proportion of employee time devoted to the activity.
- Operational proxy: what drives the core delivery model (production vs installation vs distribution).
- Customer-output proxy: what the customer primarily pays for (deliverable outcome).
- Stability control: document which proxy was used and why, so future rechecks don’t churn without a trigger.
Examples
Methodology in action (examples + deep dive)
The examples below show how a governed, establishment-level approach resolves common ambiguity patterns that often produce inconsistent NAICS results across vendors.
Definition
Establishment: a single physical location where business is conducted or services are performed. See: Establishment-Level vs Company-Level NAICS Codes.
Example 1: Multi-activity ambiguity (services + sales)
Keyword-only approaches can over-weight marketing language while under-weighting the actual delivery model. A governed workflow anchors the decision to the dominant activity, then records secondary activities to preserve stability.
The case (illustrative): “Solar Solutions & Consulting Group”
Installs solar panels, offers energy efficiency consulting, and sells solar components online.
Governed resolution process
- Candidate generation: installation vs professional services vs e-commerce.
- Primary activity test: identify what dominates the delivery model (commonly revenue when available).
- Hierarchy fit: validate sector alignment to avoid “consulting drift.”
- Boundary check: confirm included vs excluded activities on the chosen code page.
- Record secondaries: preserve stability if branding language changes.
Outcome (what is recorded)
Primary NAICS: installation-anchored selection (illustrative)
Secondary activities: consulting + online sales recorded as secondary/supporting.
Stability note: Recording secondaries reduces churn when marketing emphasizes “consulting” even if installation remains the primary activity.
Deep dive: making a “near-neighbor” decision defensible
A governed approach makes the decision explicit: what was considered, what was rejected, and why.
- Compare candidates: generate a short list across plausible activity models.
- Validate parents: ensure each candidate rolls up to the correct sector/subsector.
- Check boundaries: use included/excluded logic on code pages (not code names).
- Document why-not: record the rejection reason for adjacent codes.
Example of verification depth on a code page: 621111 — Offices of Physicians.
Example 2: Vertical integration (manufacturing + distribution)
Vertically integrated establishments are frequently misclassified into Wholesale or Retail based on channel language. A governed approach anchors the decision to the primary value-adding activity, then documents distribution as secondary.
The case (illustrative): “Apex Industrial Sealing Corp”
Designs and manufactures custom rubber gaskets; also distributes third-party seals and maintains a limited on-site counter for trade customers.
Governed resolution process
- Establishment scope: confirm what is performed at the location being classified.
- Primary activity: identify the dominant value-adding activity (often production vs distribution).
- Boundary check: validate against manufacturing vs wholesale definitions.
- Document secondaries: record distribution/retail as secondary to prevent sector drift.
Outcome (what is recorded)
Primary NAICS: manufacturing-anchored selection (illustrative)
Secondary activities: wholesale distribution + counter sales recorded as secondary.
Governance note: Channel language (“distributor”) is not decisive if manufacturing is the dominant establishment activity.
Advanced scenarios
Edge cases & complex scenarios
These scenarios frequently produce inconsistent NAICS outcomes across vendors. Use the same governed workflow: define the establishment activity model, generate candidates, validate hierarchy and boundaries, then document why-not reasoning.
Auxiliary vs primary activities
- Auxiliary/support: HR, IT, warehousing, admin support functions tied to an operating unit.
- Control: avoid classifying the support function unless it is the establishment’s primary activity.
- Stability: document support activities as secondaries to prevent drift.
Franchises (franchisor vs franchisee)
- Franchisee locations: classify by the local establishment’s activity.
- Franchisor: may align to brand/licensing/support activities.
- Control: don’t inherit the franchisor NAICS onto franchisee locations.
Digital / platform businesses
- Marketplace vs direct seller: different activity models.
- Hybrid models: record secondaries to prevent drift as mix changes.
- Control: validate “platform” claims against the actual delivery model.
Holding companies vs operating units
- Holding entity: classify the holding activity.
- Operating establishments: classify each establishment by its activity.
- Control: avoid roll-up contamination from parent to locations.
Seasonal businesses
- Primary activity over period: anchor to the reporting window you care about.
- Control: document seasonal mix to prevent month-to-month churn.
Vertically integrated operations
- Model conflict: manufacturing + wholesale + retail in one description.
- Control: anchor to the dominant value-adding activity at the establishment.
- Stability: record distribution/retail as secondaries if not primary.
Deep dive: handling acquisitions, mergers, and major operational change
M&A can change the establishment’s primary activity mix. To prevent churn, apply explicit triggers and document the change event.
- Trigger: acquisition/merger that materially changes the establishment’s operations or outputs.
- Action: re-run candidate generation + hierarchy + boundary checks using current evidence.
- Control: store effective date and rationale; retain prior NAICS vintage/assignment for historical reporting if needed.
- Stability: avoid reclassifying purely due to rebranding without operational change evidence.
Governance
Governance metrics (what to publish)
“Governed” claims are strongest when measurable. If you publish benchmark results elsewhere, summarize the headline KPIs here and link to the detailed benchmark page.
Recommended metrics to publish
| Metric | What it shows | How to measure |
|---|---|---|
| Review change rate | How often an initial assignment is corrected after review. | Track initial → final changes for sampled or production-reviewed cases. |
| Inter-rater agreement | Consistency between reviewers on ambiguous cases. | Double-code a sample and report agreement plus adjudication rules. |
| Boundary error rate | How often assignments cross incorrect sector/subsector boundaries. | Parent-child sweeps + targeted audits on high-confusion boundaries. |
| Drift rate | Stability over time (avoid untriggered churn). | Measure churn; require a logged trigger for every change. |
Publish evaluation window, sample definition, and NAICS vintage used (e.g., 2022).
Oversight
Human review & governance boundaries
Governance is not the absence of judgment—it is the control system around judgment. High-impact or ambiguous cases should include escalation, adjudication, and documented rationale.
What “human review” means here
- Evidence-first: observable signals + hierarchy + boundary checks.
- Edge-case escalation: ambiguous/high-impact decisions get additional review.
- Adjudication: disagreements resolved using boundary logic and establishment fit.
Oversight: Industry Classification Review Team
Where governance ends and discretion begins
- Governance controls: candidate generation, hierarchy fit, boundary validation, documentation, change control.
- Judgment zone: choosing primary activity when evidence conflicts or revenue mix is unknown.
- Stability rule: don’t churn without a trigger (new evidence, revision adoption, or error correction).
Quality
Quality checks and explainability outputs
NAICS assignment should be consistent and explainable. Quality checks focus on reducing drift, preventing sector misplacement, and improving repeatability across similar establishments.
Consistency checks
- Parent/child alignment check (structural fit)
- Near-neighbor boundary check (included vs excluded)
- Catch-all inflation check (overuse of broad “All Other” categories)
Explainability outputs
- Clear “what this code covers” summaries on code pages
- Included vs excluded activity clarity
- Examples + context notes for ambiguous terms
Start verifying on the directory: NAICS Code Lookup / Directory
Versioning
Revision cycles & versioning (2017 vs 2022)
NAICS is revised periodically to reflect changes in the North American economy. A governed dataset should be revision-aware so reporting remains comparable across time. Store the NAICS vintage (year) as metadata and use change control rules when adopting a new vintage.
Versioning essentials
| Control | Why it matters | Recommended practice |
|---|---|---|
| Store NAICS year | Prevents mixing vintages in reporting and eligibility workflows. | Persist a “NAICS vintage” field (e.g., 2017, 2022) for every record. |
| Crosswalk changes | Code splits/merges can break time-series comparability. | Document mapping logic during adoption; keep legacy codes where needed for history. |
| Change control | Reduces churn and unexplained reclassification. | Every change requires a trigger: new evidence, revision adoption, or error correction. |
For programs/contracts, always follow the controlling authority’s required NAICS vintage.
Compliance boundary
When to defer to agency guidance
Some scenarios require stricter rules than a general reference workflow. Treat those as compliance decisions and defer to the controlling authority.
Defer to program / agency guidance when
- A program, contract, filing, or procurement requirement specifies a NAICS code or vintage.
- Eligibility or compliance depends on the classification decision.
- The program publishes interpretation rules beyond general NAICS usage.
Do establishment assessment when
- Multiple locations have materially different primary activities.
- Branding is not a reliable indicator of operations.
- Revenue/activity mix is unclear—document uncertainty and apply stability rules.
This page is a classification reference and governance guide. It is not legal advice and does not override agency-specific rules or official program requirements. For high-stakes uses, document your evidence and follow your organization’s review and approval process.
Resources
Professional tools & resources
Use these resources to keep classification decisions consistent across research, compliance, analytics, and operational workflows.
FAQ
FAQ
- Why do businesses match multiple NAICS codes?
Many establishments operate multiple activities. A governed workflow resolves ambiguity using hierarchy fit, boundary logic (included/excluded), and primary activity rules—then documents why-not reasoning to prevent churn. - How do I confirm a NAICS code is the right fit?
Compare candidates using code page coverage notes, included vs excluded activities, examples, and parent hierarchy context. Start at NAICS Lookup / Directory. - When should I defer to agency-specific guidance?
When a program, contract, or filing specifies a NAICS code or vintage, or when eligibility/compliance depends on classification. Document your evidence and follow the controlling authority’s rules. - What if two reviewers disagree on classification?
Use an adjudication step: compare near-neighbor candidates, validate hierarchy fit, and resolve using included vs excluded boundaries. Record the final rationale so future reviews remain stable. - How often should we re-verify NAICS codes?
Re-verify on defined triggers (new evidence, operational change, or revision adoption). For steady businesses, periodic sampling audits are often more effective than blanket churn. - What documentation should we keep for audit purposes?
Keep evidence inputs used, candidate list, why-not reasoning, NAICS vintage, effective date, and approver/reviewer notes. This supports explainability and change control. - How do we handle acquisitions or mergers?
Treat M&A as a re-verification trigger when operations materially change. Store an effective date and retain prior assignments where needed for historical comparability. - What’s the difference between your methodology and Census.gov?
Census provides official NAICS structure and tools. This page provides a governance workflow for applying NAICS consistently in operational datasets (documentation, stability controls, and repeatable near-neighbor resolution).