What Is Business Code 238900 for Specialty Contractors?
Ensure your specialty trade business is correctly classified for tax reporting. Understand how to use the NAICS system to identify the most accurate code.
Business activity codes are part of the North American Industry Classification System (NAICS), a six-digit code structure used by federal agencies to classify businesses by their primary economic activity. The system allows for the collection and analysis of economic data across industries. For business owners, selecting the correct code is a required step in the annual tax filing process, allowing the Internal Revenue Service (IRS) to categorize the business for statistical and compliance purposes.
Defining the Other Specialty Trade Contractors Category
Business code 238990 corresponds to the “All Other Specialty Trade Contractors” category within the NAICS framework. This classification is a “catch-all” for specialty trade businesses in construction that do not fit into more specific categories like plumbing, electrical, or framing. The work performed by these contractors can include new construction, additions, alterations, maintenance, and repairs. This broad category encompasses specialized services not otherwise classified.
The types of businesses that fall under code 238990 are diverse. Examples include fence installation contractors, scaffolding erection and dismantling services, and companies that pave or seal driveways. Other examples are mobile home site setup and tie-down services, steeplejack work, and the construction of outdoor swimming pools. Businesses specializing in interlocking brick installation, flagpole installation, and statue erection also use this code. The common thread is that these are specialized trades not covered by other defined contractor codes.
It is important to distinguish what this category does not cover. Contractors primarily engaged in foundation, structure, or building exterior work are classified under Industry Group 2381. Similarly, those focused on installing or servicing building mechanical systems fall under Industry Group 2382. The code is for those whose primary activity is a specialized trade not detailed elsewhere in the NAICS construction structure.
How to Confirm Your Correct Business Code
A business must use the most specific NAICS code that corresponds to its primary business activity. To ensure accuracy, business owners should verify their code before filing tax returns. The U.S. Census Bureau maintains an official NAICS search tool on its website, which is the authoritative source for confirming the correct code. This resource allows for searches using keywords that describe a business’s operations.
Navigate to the NAICS search page on the Census Bureau’s site. In the search bar, enter keywords that describe your main business activity, such as “fence installation” or “driveway paving.” The search results will display a list of NAICS codes and their corresponding descriptions that contain your keywords.
Review the descriptions of the codes provided in the search results. If a specific code accurately describes your primary business activity, you should use that code. If, after a thorough search, no specific code seems appropriate, and your business is a specialty trade in the construction field, then 238990 may be the correct choice. The goal is to select the most precise classification available for accurate data and tax purposes.
Locating the Business Code on Tax Forms
Once you have confirmed the correct six-digit NAICS code for your business, you must enter it on the appropriate federal income tax form. The location for this code varies depending on the business structure and the specific form being filed. It is a required entry on several common business tax returns.
- For sole proprietors and single-member LLCs filing a Schedule C (Form 1040), the business code is entered in Box B, located in the upper section of Part I.
- For partnerships and multi-member LLCs filing Form 1065, U.S. Return of Partnership Income, will find the field for the principal business activity code on page 1, Section C.
- For C corporations filing Form 1120, U.S. Corporation Income Tax Return, enter the code in Section E on the first page.
- For S corporations filing Form 1120-S will enter their business activity code in Box B at the top of page 1.