SIC Code


Latest news:

June 24, 2014:
Financial and governement organizations still referencing SIC codes for businesses.



When registering a business, or classifying a company for tax purposes, it is important to get the most accurate SIC code possible. You should also check with a business advisor to understand the implications in some SIC codes, which may make it harder to get credit card processing services and loans.

What is a SIC Code?

Acronym for Standard Industrial Classification

SIC CodeA SIC code is a four digit code used to classify the industry that most closely matches your business description. The system was created in the 1930s in the US. To decode a SIC code, it is important to understand that the first 3 digits show an industry group, and the last digit is a classifier.

The importance of SIC codes cannot be overestimated. Many firms that do mail and other forms of marketing will buy up lists of companies by SIC code because they know that they can target those potential customers with special messaging. For example, SIC code 1311 is for Crude, Petroleum, and Natural Gas industries, so a marketer of oil drilling equipment or pipeline accessories will have a natural audience in everyone that fits into such a category. For tax and business purposes, it may be essential to have the right SIC code in order to get a loan, as a bank may refuse to lend for an irrelevant purpose if the SIC codes indicate that you would have no business use for the item you are looking to buy. When companies merge, it may be necessary to reclassify SIC codes with the SEC and EDGAR since they may suddenly fall under a different classification. While the SIC code system is a bit antiquated, and essentially has been supplanted by governments in the US with longer numerical systems, there are still a lot of businesses who prospect based around SIC codes, and who may choose not to go into business with companies that are not based around a specific SIC code range. Additionally, an IRS audit may be in your future if your SIC code is not in line with the deduction that you are claiming.

Data Mining, Sales Prospecting, and SIC Codes

The use of SIC codes for data mining and sales prospecting goes back decades, and expanded exponentially as long distance telephone costs decreased.  Companies like Dun & Bradstreet (D&B) will aggregate data from public records and other sources, and most of these agencies include the SIC information as part of their database. This makes it possible for marketing, direct mail, and corporate decision makers to either check out an individual firm for business credit purposes, or to purchase lists with millions of business results related to various industrial classifications. The downside of this type of information aggregation is that the rating agency may have old information on file, or may not have the correct code listed. In this case, your company may either be denied loans, credit, or business relationships. Alternatively, you may be getting the “wrong” kind of junk mail from interested vendors.

Correcting Bad SIC information

Correcting SIC codes is not always easy, since it involves changing records with tax agencies, private corporations, and credit rating services. A corporate officer may have to contact banks in order to have this data altered.

Merchant Category Codes

>In credit card processing, Visa and MasterCard assign 4 digit numbers known as “Merchant Category Codes” to firms that accept payment cards. It is similar to SIC codes in that it places merchants in specific risk and reporting categories. Some MCC codes will indicate that your data will be reported to the US internal revenue service.  Your company will get a 1099-K form, and may be subject to backup withholding if your information does not match up with IRS records. Form 147c can help you determine if your information does not match.


The Occupational Safety and Health Administration (OSHA) will have different inspection protocols based around your company's SIC code. Once again, it is essential to have the correct information listed about your industry classification, as you may pay extra for regulatory compliance in the form of safety equipment and training that is not necessary under some classifications. Even worse, if you are operating under the incorrect code for your business, OSHA inspectors could fine you if you do not have the correct safety protocols, equipment, and training in place.

Notes and Special Information

Special note: In the United States, the NAICS, or North American Industry Classification System has replaced the SIC code, but the codes are still used by the Securities and Exchange Commission, and agencies worldwide.