What is a SIC Code?

Standard Industrial Classification (SIC) codes are four-digit numerical codes assigned by the U.S. government to business establishments to identify the primary business of the establishment. The classification was developed to facilitate the collection, presentation and analysis of data; and to promote uniformity and comparability in the presentation of statistical data collected by various agencies of the federal government, state agencies and private organizations. The classification covers all economic activities. (See: What is a NAICS Code?)

The SIC system arrays the economy into 11 divisions, that are divided into 83 2-digit major groups, that are further subdivided into 416 3-digit industry groups, and finally disaggregated into 1,005 4-digit industries.

What is a Primary SIC Code?

Each and every company will have a primary SIC code. This number indicates a company's primary line of business. What determines a company's primary SIC code is the code definition that generates the highest revenue for that company at a specific location in the past year.

Helpful SIC Code Tools

• SIC Code Directory & Lookup - Look up and identify SIC Codes by Keyword or code number
• SIC-to-NAICS Cross Reference - Convert SIC Codes to NAICS Codes
• NAICS-to-SIC Cross Reference - Convert NAICS Codes to SIC Codes

How to Read a SIC Code

The first two digits of the code identify the major industry group, the third digit identifies the industry group and the fourth digit identifies the industry. Please see example below:

Division
(Top Level)

• 20-39 - Manufacturing

Major Group
(2nd Level)

• 25 - Furniture and Fixtures

Industry Group
(3rd Level)

• 252 - Office Furniture

Industry
(Final Level)

• 2521 - Wood Office Furniture

Note: The digit "9" is used in the third or fourth digit position of the classification code to designate miscellaneous industries not elsewhere classified (NEC). These miscellaneous classifications are not comprised of homogeneous primary activity groups. They are grouped together and treated as a separate industry in order to retain the homogeneity of the other industries in the group.

SIC History

OMB - Office of Management and Budget
SIC - Standard Industrial Classification
NAICS - North American Industrial Classification System
NAFTA - North American Free Trade Agreement

How do Businesses use SIC Codes?

• Industry Identification
  Companies utilize SIC (Standard Industrial Classification) codes to categorize their customers by industry. This classification aids in organizing SIC Business Lists, making it easier to analyze customer demographics.
• Market Segmentation for Marketing Campaigns
  Professionals leverage SIC codes to segment markets effectively, allowing for targeted marketing campaigns and comprehensive customer research. This segmentation helps businesses tailor their strategies to specific industry needs.
• Customer List Enhancement
  By appending SIC codes to their customer databases, companies can gain insights into the industries their clients belong to. This information is crucial for planning future marketing initiatives, as it highlights which sectors to focus on (See: SIC Code Append).
• Comprehensive Business Listings
  SIC codes provide a more detailed and comprehensive classification compared to NAICS (North American Industry Classification System) codes, making them a preferred choice for generating business lists (See: SIC vs NAICS).
• Competitor Analysis
  Businesses can identify both public and private competitors within their sector by using SIC codes, allowing for strategic planning and competitive analysis.
• Regulatory Compliance
  Companies operating within specific industries must use designated SIC codes when filing with the SEC (Securities and Exchange Commission) to ensure accurate representation of their business activities.
• Government Contract Identification
  SIC descriptions play a key role in identifying relevant government contracts, aiding businesses in securing opportunities aligned with their industry.
•  Registrations and DUNS Number Acquisition
  SIC codes are often required for state and federal registrations, as well as when obtaining a DUNS number, which is essential for business credit and identification.
• Tax Compliance
  Many tax-related forms and applications require the submission of your business's SIC code, making it important for compliance purposes.
  
• Lending and Financial Services
  Lenders frequently use SIC codes to assess the industry affiliation of a company. Thus, having the correct SIC code is vital for accurate business classification and can impact lending decisions.

Government Use of SIC Codes: Key Applications

• Promoting Uniformity and Comparability
  The government employs SIC codes to ensure consistency and comparability in the statistical data collected across various federal agencies, state organizations, and private entities. This standardization facilitates clearer insights and comparisons over time.
• Efficient Data Gathering and Analysis
  SIC codes streamline the process of data collection and analysis, allowing government agencies to compile and interpret industry-related information quickly and effectively.
• SEC Filings Organization
  The Securities and Exchange Commission (SEC) utilizes SIC codes to categorize and sort company filings. This helps in organizing vast amounts of financial data, making it easier for regulators and the public to access and understand company information.
• Tax Classification
  SIC codes play a crucial role in tax classification by categorizing businesses based on their primary income-generating activities. This classification aids in the accurate assessment and collection of taxes.
• Industry Organization for Research
  SIC codes provide a numerical system that organizes industries based on the highest revenue source at a specific location. This organization is essential for research applications, enabling detailed analysis of economic activities.
• Historical Context for Government Contracts
  Traditionally, government contracts were identified and awarded based on SIC codes, such as SAM - System for Award Management. This historical use highlights the importance of SIC codes in the federal procurement process (See: What is a NAICS Code)

The Importance of Using SIC Codes for Business Success

SIC codes have been defined by the U.S. Government as the most exact industry classification. Use SIC codes for targeting purposes by accessing the 15+ million SIC code directory of companies. Identify your current customers by their SIC code and find new clients within the same or similar industries. SIC codes are required for state registration, federal registration, tax purposes, when filing your DUNS number, and when seeking eligibility for government contracts.

• What is the difference between 4,6,8-digit SIC codes?
• SIC Codes vs. NAICS Codes