Ever filled out a tax form and wondered what the heck an NAICS (North American Industry Classification System) code was? Here are instructions on how to select the right NAICS code as a jeweler that manufactures a finished product and sells both wholesale and retail.
You can use the search feature at www.census.gov/naics. In the "2017 NAICSSearch" box on the left side of that page, enter a keyword that describes your kind of business. A list of primary business activities containing that keyword and the corresponding NAICS codes will appear.
Google, of course, directs you to NAICS search, but how do you pick from this list?
If you’re a Retail Jewelry Store, great: 448310
If you only sell Jewelry at Wholesale, boom: 423940
If you only Manufacture Jewelry, you’re solid: 339910
But, what if you do all of the above? What if you are a fine art jeweler and manufacture your goods in-house, and sell to both wholesale and retail clients?
To really throw a wrench into your decision making, there is NAICS code 454111 Electronic Shopping, for those that are retailing via the Internet. This is even for Retail Brick and Mortar Stores, that perhaps have a higher concentration of internet retailing than physical in-store sales.
How do you choose which NAICS code to use if you're a jeweler?
Pick the majority share.
My dear jewelers, this is not a fine art, nor a well-crafted science.
This is an effort to put you in a bucket with similar businesses to compare your business reporting to others of the same size.
This is how your Facebook ad targeting is defined. This is how the IRS can say your income and expenses should fall within a given range. This is how market research and industry statistics are facilitated.
Diagnose your businesses revenue streams and pick the NAICS code that fits best.
What is the highest concentration of sales coming from:
• Retail Sales?
• Wholesale Sales?
• Web Sales?
If you are hand fabricating, casting, or doing production, and selling a fairly similar amount in all three sales streams, then choose Jewelry and Silverware Manufacturing 339910.
If you sell mostly online, even if it is a mix of wholesale and retail, then use Electronic Shopping 454111.
If you are a maker and selling mostly at Jewelry Trade Shows, then choose Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers 423940.
If you don’t have a public store front, but are open by appointment only or sell at Art Shows, and your highest revenue stream is Retail Sales, then select Jewelry Stores 448310.
All clear? If you still aren’t clear on your selection, do a keyword search at NAICS.com and read the details for each code title that relates most to your line of work.
If you need additional help, please comment below for our input, contact us, or reach out to your local tax authority. Never be afraid to call your local tax office and ask a question. They are very helpful if you speak nicely.