Purpose and Use of Nonemployer Statistics
Nonemployer Statistics provide U.S. and subnational economic data by industry
for businesses that have no paid employees and are subject to federal income
tax. This series is useful for studying the economic activity of small
businesses at various geographic levels. Businesses use the data for analyzing
market potential, measuring the effectiveness of sales and advertising programs,
and developing budgets. Government agencies use the data for administration and
planning.
Most types of businesses covered by the Census Bureau economic
statistics programs are included in the Nonemployer Statistics. All of the
Agriculture, Forestry, Fishing, and Hunting sector, except crop and animal
production, are covered in Nonemployer Statistics. These industries typically
are not covered in other Census Bureau economic programs. Most nonemployers are
self-employed individuals operating very small unincorporated businesses, which
may or may not be the owner’s principal source of income. Although nonemployers
constitute a large part of the business universe in terms of the number of
firms, they contribute a relatively small portion of the overall sales
and receipts data. Tax-exempt businesses are excluded from the nonemployers
tabulations.
Nonemployer Statistics have been released every 5 years
since 1972, for years ending in "2" and "7" for selected industries in
conjunction with Economic Census publications. Comparability of data over time
may be affected by definitional changes for firms, activity status,
industrial classifications, and processing
methodology. For more details on these changes, see the section
"Comparability With Other Data,” below. The 2002 Nonemployer Statistics is part
of the 2002 Economic Census Core Business Statistics Series. Nonemployer
Statistics was first released as an annual series beginning with the 1998
report.
SOURCES OF DATA
Nonemployer Statistics data originate from administrative records of the Internal Revenue Service (IRS). Data are primarily comprised of sole proprietorship businesses filing IRS Form 1040, Schedule C, although some of the data is derived from filers of partnership and corporation tax returns that report no paid employees. These data undergo complex processing, editing, and analytical review at the Census Bureau to distinguish nonemployers from employers, correct and complete data items, and form the final nonemployer universe.
INDUSTRY, GEOGRAPHY, AND LEGAL FORM OF ORGANIZATION CLASSIFICATIONS
Industry Classifications
The Nonemployer Statistics is published based on the North American Industry Classification System (NAICS). The 1997 NAICS codes are the basis of industry classification for the nonemployer data tabulated for reference years 1997 through 2001. Starting with 2002, Nonemployer Statistics are classified and tabulated based on the 2002 NAICS codes, which contain several significant revisions from the 1997 codes. Detailed information about NAICS, including changes for 2002, and comparability with 1997 codes, is available at http://www.census.gov/epcd/www/naics.html
The Nonemployer Statistics series includes the following NAICS sectors:
Sector | Description |
---|---|
11(pt) | Agricultural Support, Forestry, Fishing, and Hunting |
21 | Mining |
22 | Utilities |
23 | Construction |
31-33 | Manufacturing |
42 | Wholesale Trade |
44-45 | Retail Trade |
48-49 | Transportation and Warehousing |
51 | Information |
52 | Finance and Insurance |
53 | Real Estate and Rental and Leasing |
54 | Professional, Scientific, and Technical Services |
56 | Administrative and Support and Waste Management and Remediation Services |
61 | Educational Services |
62 | Health Care and Social Assistance |
71 | Arts, Entertainment, and Recreation |
72 | Accommodation and Foodservices |
81 | Other Services (except Public Administration) |
The following NAICS industries are excluded from Nonemployer Statistics:
If coded to: | Reclassified as: |
---|---|
New Car Dealers (NAICS industry 44111) | Used Car Dealers (NAICS industry 44112) |
Department Stores (NAICS industry group 4521) | General Merchandise Stores (NAICS subsector 452) |
Rail Transportation (NAICS industry 48211) | Support Activities for Transportation (NAICS subsector 488) |
Hospitals (NAICS subsector 622) | Other Ambulatory Health Care Services (NAICS industry group 6219) |
Oil and Gas Extraction (NAICS industry group 2111) in areas without oil and gas production | Other Financial Investment Activities (NAICS industry group 5239) |
Sources for assigning Nonemployer Statistics industry classifications are the Social Security Administration, the Internal Revenue Service (IRS), and the Bureau of Labor Statistics. Industry classifications derived from the IRS are self-classified by tax filers.
The industry titles used in this series are the short NAICS titles. Information on NAICS and recent changes are at http://www.census.gov/epcd/www/naics.html. Nonemployer Statistics are limited to approximately 300 industries that are available through administrative-record sources, and are common to all three legal forms of organization applicable to nonemployer businesses. Because of this, data for nonemployers generally are provided at broader levels of industry detail than data for employers.
For those nonemployer businesses that were unclassified, NAICS classifications were imputed by assigning the code of a nonemployer business with comparable receipts located in the same county. For more information, refer to Coverage and Methodology.
Geography Classification
The Nonemployer Statistics data series provides summary tabulations for the
United States, each state, the District of Columbia, each county (and county
equivalent), and metropolitan areas.
Most geography codes are derived
from the business owner`s mailing address identified from administrative
records. Because the owner’s mailing address may not be the same as the physical
location of the business, the resulting geography codes do not always represent
where business is actually conducted.
The nonemployer tabulations exclude
records with invalid, foreign, or military geographic locations. The independent
cities in Virginia and the cities of Baltimore, MD, Carson City, NV, and St.
Louis, MO, are treated as separate counties. Puerto Rico and Outlying Areas are
not included in the nonemployer tabulations.
Legal Form of
Organization Classification
The legal form of organization for nonemployer businesses is derived from administrative record sources. Nonemployer Statistics presents U.S.-level data by the following three legal forms of organization:
DEFINITIONS OF BASIC DATA ITEMS
Firms
Generally, a firm is a single physical location where business is conducted or services or industrial operations are performed. However, for nonemployers we count each distinct business income tax return filed by a nonemployer business as a firm. A nonemployer business may operate from its owner’s home address or from a separate business location. Most geography codes are derived from the business owner`s mailing address, which may not be the same as the physical location of the business.
Receipts
Includes gross receipts, sales, commissions, and income received from trades
and businesses, as reported on annual business income tax returns. Business
income consists of all payments received for services rendered by nonemployer
businesses, such as payments received as independent agents and
contractors.
The composition of nonemployer receipts may differ from
receipts data published for employer establishments. For example, for wholesale
agents and brokers without payroll (nonemployers), the receipts item contains
commissions received or earnings. In contrast, for wholesale agents and brokers
with payroll (employers), the sales and receipts item published in the 2002
Economic Census represents the value of the goods involved in the
transactions.
COMPARABILITY WITH OTHER DATA
The
comparability of data with previous Nonemployer Statistics series may be
effected by the following:
RELIABILITY OF THE DATA
The Nonemployer data are subject to nonsampling errors such as industry misclassification, as well as errors of response, nonreporting and coverage. The IRS Tax Reporting Relief program allowed taxpayers in hurricane affected regions additional time in filing tax returns. The 2004 and 2005 Nonemployer totals may be low due to late tax reporting in hurricane impacted counties/regions.
DATA WITHHELD FROM PUBLICATION
In accordance with U.S. Code, Title 13, Section 9, no data are published that
would disclose the operations of an individual business. Because the preponderance
of Nonemployer Statistics data items originate with the IRS, we adhere to both
Census Bureau and IRS disclosure guidelines. For tables at all levels of geography
(U.S., state, county, metropolitan area) we publish the number of firms and
receipts in a data cell only if it contains three or more nonemployer businesses.
In tables based on data from reference year 2004 or earlier, cell suppression
was used to protect data confidentiality for those cells that had a value based
largely on contributions from one or two firms. Beginning with reference year
2005, values for each firm are perturbed prior to table creation by generating
a random noise multiplier that is chosen independently for each company. This
perturbation is used to protect firm and company values from disclosure. This
protection is accomplished in a manner that causes the vast majority of cell
values to be perturbed by at most a few percentage points. When the number of
firms for a cell is only one or two, the cell value is suppressed, and these
suppressions are assigned a flag of “D”.
If more than 40 percent of either receipts or firms in a published data cell
are from firms with an imputed industry classification, we suppress both items
because the data do not meet publication standards. These suppressions, as well
as any other data cells not meeting publication standards, are assigned a flag
of "S." The "S" flag indicates there are firms engaged in economic activity
for that industry level and the suppressed data are included in higher-level
totals.
For an introduction to the noise confidentiality protection method, see Using
Noise for Disclosure Limitation of Establishment Tabular Data by Timothy
Evans, Laura Zayatz, John Slanta in the Journal of Official Statistics (1998).
For specific information about the application of this method to Nonemployer
Statistics, contact the Economic Planning and Coordination Division, Register
Analysis Branch listed below.
DATA PRODUCTS
Data Formats
Nonemployer Statistics series data are available in CD-ROM, DVD-ROM, and
hypertext table (html) formats for U.S., state, county, and metropolitan area
levels and in portable document format (pdf) at the U.S. and state level only.
No printed publications of Nonemployer Statistics are available. However, our
Customer Service Branch will print and bind the pdf version for a fee. See
contact information below.
Only the NAICS classifications common to all
three legal form of organization classifications assigned to nonemployer
businesses are shown in the tabulations. Only those NAICS classifications with
economic activity are displayed.
The Nonemployer Statistics CD-ROM
contains menu-driven access software. The CD-ROM also includes software for
creating nonemployer data files compatible with popular database and spreadsheet
software. The CD-ROM is a powerful software tool to search and manipulate
nonemployer data.
The Nonemployer Statistics data products on html and
pdf can be accessed at http://www.census.gov/epcd/nonemployer/index.html.
In order to view the pdf files, you will need the Adobe Acrobat Reader, which is
available for free from the Adobe Web site at http://www.adobe.com/. Two tabulations are
presented in pdf. The U.S.-level tabulation presents the number of
firms and receipts by NAICS industry and by legal form of organization.
The state-level tabulation presents number of firms and receipts by
NAICS industry for each state and the District of Columbia.
To
order Nonemployer Statistics data products, contact:
Customer Services Branch
Marketing Services Office
U.S. Census Bureau
Washington, DC 20233Telephone: 301-763-INFO (4636)
Internet Link (Under CENSUS PRODUCTS, Click BUSINESS)
For more information on Nonemployer Statistics, including special tabulations, contact:
U.S. Census Bureau
Economic Planning and Coordination Division
Register Analysis Branch
Washington, DC 20233Telephone: 301-763-2580
Fax: 301-763-6633
E-mail: epcd.nonemployer.statistics@census.gov
ABBREVIATIONS AND SYMBOLS
The following abbreviations and symbols are used in this data series:
(D) - Withheld to avoid disclosing data for individual businesses; data are
included in broader industry totals.
(S) - Withheld to avoid releasing data
that do not meet publication standards; data are included in broader industry
totals.
NAICS - North American Industry Classification System
PMSA -
Primary Metropolitan Statistical Area
CMSA - Consolidated Metropolitan
Statistical Area
MSA - Metropolitan Statistical Area
Source: U.S. Census Bureau, EPCD, Nonemployer Statistics.