When you operate your own cleaning business you will be asked all types of questions from time to time.
One of those questions will be the following… What is your NAICS or SIC code? When I was asked I replied “Huh… what’s that?” A little homework uncovered the answer.
The NAICS code for the cleaning industry
The six digit code is… 561720 for anyone who is in the janitorial or house cleaning industry. The only catch is the MAJORITY of your revenue must come from cleaning services.
This means you can’t classify as a cleaning company with the code of 561720 but have most of your earnings come from carpet cleaning. This is because carpet cleaning falls under another code.
So to make a long story short, if MOST of your income is just your run of the mill cleaning services then 561720 is your code. Sometimes people may muddy the water and ask you for a “SIC code” instead of a NAICS code.
They are really the same thing, as the SIC code was the OLD SYSTEM that was used up until 1997, when the new NAICS code replaced it. The code gets updated every five years by the U.S government with the next update coming in 2017.
What’s the NAICS used for?
NAICS is shorthand for the North American Industry Classification System. This is a system that our government came up with to classify business establishments into 20 industries according to their economic activity.
The classification system is used to collect, analyze, and publish all types of useful data about our economy. Both Canada and Mexico have also agreed to use NAICS. This creates a “standard system” of how to measure the economy across North America.
When will I need to use the code?
There is no easy answer to that question, as it all “depends on the circumstances” so to speak. In some cases state or federal agencies (or both perhaps) require a business to provide a NAICS code for administrative, contracting or tax purposes.
In other cases some state governments offer tax incentives from time to time to businesses. When they do they use the NAICS codes to sort it all out. So if you fall under the proper code, you get the credit that is currently being offered.
At the end of the day you probably won’t need to know the code all that often. My company needs to supply it once per year to the state for some year-end report we are required to submit. Other than that I can’t remember many other times we needed it.
If you need more info on the code or just want to see for yourself how to find your code then head on over to the NAICS search page and look up janitorial services.
January 5, 2014 by Tom Watson