What Is NAICS Code 999999 and Should I Use It?
Understand the limited purpose of NAICS code 999999 and how an unclassified status can affect your business's access to financing and contracts.
The North American Industry Classification System (NAICS) is a framework used by federal statistical agencies to classify business establishments for collecting and analyzing data. Within this list of codes is 999999, a designation that requires careful consideration by any business owner.
Understanding Code 999999
The NAICS code 999999 represents “Unclassified Establishments.” This is not a catch-all category for businesses that are difficult to classify or that perform multiple functions. Its application is narrow, intended only for an establishment whose primary business activity cannot be assigned to any other specific industry, making it a code of last resort.
Using this code signifies that a business’s function is so unique or novel that it does not fit within the existing framework. For example, a new business that has not yet determined its primary revenue-generating activity might be temporarily unclassified. However, it should not be selected if a more fitting, albeit imperfect, code is available.
Implications of an Unclassified Status
Selecting code 999999 can have practical and financial consequences. For lenders and insurance underwriters, this code can act as a red flag, signaling an undefined or potentially high-risk business model. This can lead to difficulties in securing business loans, as financial institutions use NAICS codes to assess industry risk and determine eligibility for specific financing products.
It can create challenges in obtaining business insurance coverage at competitive premiums. Insurers rely on NAICS codes to gauge a company’s operational risks and set rates accordingly. An unclassified business may face higher premiums or even be denied certain types of coverage. The designation can also render a business ineligible for government contracts and grants. The Internal Revenue Service (IRS) also views code 999999 with caution, as it may suggest an attempt to obscure the nature of the business, potentially triggering additional scrutiny or delays in tax return processing.
How to Find the Correct Code
The primary resource is the official U.S. Census Bureau website, which features a comprehensive NAICS search tool. Business owners should use this tool to search for keywords that accurately describe their primary business activities, products, or services. It is advisable to try several different keywords to explore all potential matches.
When reviewing the search results, the objective is to find the code that represents the best possible fit for the establishment’s main revenue-generating operation. Even if a business engages in multiple activities, the code must correspond to the primary one. Choosing the closest match is a better practice than defaulting to 999999. This ensures the business is properly categorized for statistical and financial purposes.