What Is An Auxiliary Establishment In The SIC Code System?

Establishment Unit

A unit that performs auxiliary functions and is located physically separate from the establishment or establishments served is treated as a separate establishment. A unit that performs auxiliary activities at the same physical location as an establishment that performs operating activities is considered a separate establishment if all of the following conditions are met:

1. Separate reports can be prepared on the number of employees, their wages and salaries, sales or receipts, and other types of establishment data

2. The unit serves other establishments of the same enterprise

3. Employment is significant for both the auxiliary and operating activities

Exceptions and Borderlines

Some establishments that meet the general definition of auxiliaries are nevertheless treated as operating establishments. They are listed below:

1. Establishments primarily engaged in producing goods or providing services for other establishments of the same enterprise when such goods or services are covered by industries in Agriculture (Major Groups 01-07 excluding - 08, 09 of Division A); Mining (Division B); Construction (Division C); and Manufacturing (Division D) are classified as operating establishments in such Divisions on the basis of their primary activity.

2. Establishments, including sales branches, sales offices, and sales representatives, primarily engaged in selling tangible products for other than personal or household consumption are classified as operating establishments in Wholesale Trade, with the exception of motion pictures and prerecorded video tapes and disks of the type produced by establishments covered in Major Group 78. Establishments primarily engaged in the wholesale distribution of motion pictures and prerecorded video tapes and disks of the type produced by establishments covered in Major Group 78 are classified in Services, Industry 7822.

3. Establishments primarily engaged in research, development, and testing of aircraft, guided missiles, and space vehicle units and parts, covered by Industry Group 372 or Industry Group 376, are classified as operating establishments in these manufacturing industries if they are part of an enterprise that usually manufactures such products. These establishments are often funded by government contracts rather than by funds of the enterprise. Establishments of these enterprises primarily engaged in research, development, and testing of products not covered by Industry Group 372 or 376 are classified as auxiliary establishments. Establishments primarily engaged in research, development, and testing of products for other enterprises on a contract or fee basis are classified as operating establishments in Services, Industry Group 873.

4. Research farms are classified as operating establishments in Agriculture, Forestry, and Fishing, Division A.

5. Establishments primarily engaged in long-distance trucking, stevedoring, water transportation, or pipeline transportation for other establishments of the same enterprise are classified as operating establishments in Transportation, Division E.

6. Establishments primarily engaged in new or replacement construction for establishments of the same enterprise covered by industries in Division E are classified as operating establishments in Construction, Division C. Establishments primarily engaged in repair and maintenance for establishments of the same enterprise covered by industries in Division E are classified as operating establishments in Division E. However, all establishments of the U.S. Postal Service are classified in Industry 4311.

7. In Public Administration, Division J, establishments primarily engaged in performing central administrative and managerial activities are classified as operating establishments. Establishments primarily engaged in performing other auxiliary activities for establishments in Public Administration, Division J, such as warehouses, automotive maintenance shops, and recreation facilities, are classified as auxiliary establishments.

8. Establishments primarily engaged in performing auxiliary activities for enterprises that do not have operating establishments in the United States are classified as operating establishments on the basis of the establishment's primary activity in the United States.

Specific Examples of Auxiliary Establishments

The following are examples of auxiliary establishments primarily engaged in performing management or support services for other establishments of the same enterprise:

1. Central administrative offices primarily engaged in performing management and general administrative functions, except establishments of Public Administration, Division J. Central administrative offices may perform such activities as general management; accounting; computing, tabulating, or data processing; purchasing; engineering and systems planning; advertising; public relations or lobbying; and legal, financial, or related managerial functions.

2. Establishments primarily engaged in research, development, and testing for other establishments of the same enterprise, except establishments of aircraft, guided missile, and spacecraft manufacturers as defined in Exceptions and Borderlines.

3. Warehouses and storage facilities primarily serving other establishments of the same enterprise.

4. Maintenance and repair shops primarily serving other establishments of the same enterprise for the maintenance and repair of its own machinery and equipment.

5. Automotive repair shops or storage garages operated by an enterprise primarily for repair or storage of its own vehicles.

6. Establishments primarily engaged in news collection, editorial work, or advertising sales related to publishing activities for other establishments of the same enterprise.

7. Establishments primarily providing equipment to construction establishments of the same enterprise.

8. Establishments primarily engaged in providing field engineering support services for other establishments of the same enterprise at locations other than the parent facility, e.g., at the customer's site.

9. Showrooms in which sales do not take place.

10. Recreation facilities, such as gymnasiums, golf courses, and swimming pools, maintained by an enterprise for the benefit of its employees.

11. Milk receiving stations for dairies.