Explanation of Terms

Annual payroll.
Annual payroll consists of the combined amount of wages paid, tips reported, and other compensation including salaries, vacation allowances, bonuses, commissions, sick-leave pay, and the value of payments- in-kind (such as free meals and lodging) paid to all employees during the calendar year before deductions for social security, income tax, insurance, union dues, etc. All forms of compensation are included, whether or not subject to income tax or FICA tax, with the exception of annuities, third-party sick pay, and supplemental unemployment compensation benefits (even if income tax was withheld). For corporations, total payroll includes compensation paid to officers and executives; for unincorporated businesses, it does not include profit or other compensation of proprietors or partners.

Employment.
Employment includes all employees, full-time and part-time, reported on a firm’s payroll during specified pay periods in 1997. Persons on paid sick leave, paid holidays, and paid vacations are included as employees, as are salaried officers and executives of corporations. However, proprietors and partners of unincorporated businesses are not considered as employees. The derivation of the 1997 employment figures vary somewhat among the different industries. For firms in the minerals, manufacturing, and construction industries, employment represents an annual average of the number of ‘‘production workers’’ on the payroll for any part of the pay periods including the 12th of March, May, August, and November, plus the number of ‘‘all other employees’’ on the payroll during the March 12th pay period. For the other industries covered by the economic censuses and for those industries not covered, employment consists of all employees on the payroll of a firm during the pay period including March 12.

Establishment.
An establishment is a business or industrial unit at a single physical location which produces or distributes goods or performs services.

Ethnicity.
The ethnic categories listed on the survey questionnaires are consistent with those mandated by the Office of Management and Budget. These standards were developed by both the Executive Branch and Congress.

Firm.
A firm is a business consisting of one domestic establishment or more that the reporting firm specified under its ownership or control at the end of 1997. If a company owned or controlled other companies, all establishments of the subsidiaries are included as part of the owning or controlling company. In this report, the terms company and firm are used interchangeably.

Legal form of organization.
The five legal forms of organization included in this report are:

1. C corporation.
Any legally incorporated business, except subchapter S, under state laws.

2. Subchapter S corporation.
A legally incorporated business under state laws. A subchapter S corporation is a special IRS designation for legally incorporated businesses with 75 or fewer shareholders who, because of tax advantages, elect to be taxed as individual shareholders rather than as corporations.

3. Individual proprietorship.
An unincorporated business owned by an individual. Also included in this category are self-employed persons. The business may be the only occupation of an individual or the secondary activity of an individual who works full time for someone else.

4. Partnership.
An unincorporated business owned by two or more persons.

5. Other.
Included in this group are cooperatives, estates, receiverships, and businesses classified as unknown legal forms of organization.

Race.
The race categories listed on the survey questionnaires are consistent with those mandated by the Office of Management and Budget. These standards were developed by both the Executive Branch and Congress.

Sales and receipts.
Sales and receipts are defined as the receipts for goods produced or distributed or services provided. Excluded from sales are nonoperating receipts, returns on investments, and interest. For firms with multiple locations, sales and receipts are reported for each location or establishment of the firm. These sales and receipts include estimated values assigned to intra-company transfers of goods and services among establishments within the same company. The value of a firm’s sales and receipts as shown in this publi- cation is the aggregate of these establishment receipts. Because of duplication, the aggregates of these establish- ments’ sales and receipts ordinarily exceed a firm’s total net sales and receipts, which reflect only commercial transactions with outside customers.