Yes, a company can have more than one NAICS code, and most businesses with more than one line of activity should carry several. You designate one code as your primary — the one tied to the activity that produces the largest share of your revenue — and add secondary codes for the other real activities your business performs. How many you can list, and where, depends on the system you’re registering in.
Primary Code Versus Secondary Codes
NAICS is the six-digit classification system federal statistical agencies use to categorize business establishments.1United States Census Bureau. Economic Census: NAICS Codes and Understanding Industry Classification Systems Classification happens at the establishment level, so a single corporation running, for example, a restaurant chain and a separate warehouse operation gets a different code for each location.
The Census Bureau itself assigns only one code per establishment, based on its primary activity. Other federal systems are more flexible. SAM.gov, where businesses register to bid on federal contracts, lets you list one primary code plus as many secondary codes as accurately describe what you do. No government office assigns codes to every business; companies identify their own codes using the official NAICS structure and federal guidelines.
How to Pick Your Primary NAICS Code
Your primary code corresponds to the activity that generates the largest percentage of total receipts. The IRS states this directly in its Form 1120 instructions: identify the activity producing the largest percentage of total receipts, then use that code.2Internal Revenue Service. Instructions for Form 1120 (2025) – Principal Business Activity Codes There’s no 51% threshold. If revenue splits 35/30/35 across three activities, you choose between the two 35% activities based on which best represents your core operations.
When revenue alone doesn’t clearly point to one dominant activity, the SBA takes a broader look. Under 13 CFR 121.107, the agency considers the distribution of receipts, employees, and costs of doing business across each industry you operated in during the most recently completed fiscal year, and it may also weigh patents, contract awards, and assets.3eCFR. 13 CFR 121.107 – How Does SBA Determine a Concerns Primary Industry The Census Bureau uses a similar hierarchy, defaulting to revenue and then production costs and employment.4U.S. Census Bureau. 2022 NAICS Manual – Introduction
The Five-Year Averaging Rule
For SBA size purposes, revenue isn’t just last year’s number. Firms with five or more years of history calculate average annual receipts over their five most recently completed fiscal years. The SBA moved from a three-year to a five-year averaging period, with the change fully in effect since January 2022.5Federal Register. Small Business Size Standards: Calculation of Annual Average Receipts One strong year gets diluted across five, and a steady climb keeps lower historical years in your average longer.
How to Pick Secondary Codes
Every secondary code should correspond to a real, current business activity, not something you plan to launch next year. The practical test is whether you can point to revenue from it. A clear percentage breakdown of gross receipts by line of business makes your codes defensible if an agency or auditor asks. A construction firm that also sells building materials and rents equipment would carry three distinct codes for three real revenue streams.
The NAICS Manual organizes codes hierarchically: the first two digits identify the broad sector, and each additional digit narrows the classification down to the six-digit national industry.4U.S. Census Bureau. 2022 NAICS Manual – Introduction The Census Bureau’s keyword search tools let you type what you do and find candidate codes.
The most common mistakes are codes that are too broad or too narrow. A code that’s too broad can group you with much larger competitors under the applicable size standard. A code that’s too narrow can exclude you from contract opportunities that actually match your capabilities. Reading the full description for each candidate code in the NAICS Manual prevents both errors.
Where Your Multiple NAICS Codes Get Recorded
SAM.gov
SAM.gov is the system where multiple codes matter most in practice. Codes are entered in the Assertions section of your entity profile, where you designate one as primary and add as many secondary codes as fit your business. Contracting officers use these to identify potential vendors for solicitations, so under-listing your capabilities can cost you opportunities. Plan for a few business days for registration updates to process rather than counting on same-day turnaround.
IRS Tax Returns
Federal tax forms accept only one code. Corporations report their principal business activity code on Form 1120, Schedule K, line 2a, using the activity that generates the largest percentage of total receipts.2Internal Revenue Service. Instructions for Form 1120 (2025) – Principal Business Activity Codes Sole proprietors and single-member LLCs report the equivalent code on Schedule C, line B.6Internal Revenue Service. Instructions for Schedule C (Form 1040) (2025) If your revenue mix shifts year to year, the reported code should shift with it. Keeping the primary code on your return consistent with the primary code in SAM.gov matters. A mismatch can raise questions during contract audits or size reviews.
State Filings
Most state-level filings don’t ask for a NAICS code. Articles of incorporation, articles of organization, and annual reports filed with the Secretary of State typically request business name, address, registered agent, and management structure.7U.S. Small Business Administration. Register Your Business NAICS codes primarily matter at the federal level.
Why Multiple Codes Matter for Small Business Size Standards
The SBA sets a different size standard for each NAICS code. Some are measured in average annual receipts, others in number of employees.8eCFR. 13 CFR Part 121 – Small Business Size Regulations Whether your company qualifies as small depends entirely on which code is being applied.
Here is the part owners regularly miss: for a federal contract, your size isn’t judged by your primary NAICS code. It’s judged by the code the contracting officer assigned to that specific solicitation. You must not exceed the size standard for the solicitation’s designated code, not the code you consider your primary industry.9eCFR. 13 CFR 121.402 – What Size Standards Are Applicable to Federal Government Contracting Programs For orders against multiple-award contracts, each order can carry its own code and its own size standard.
A company might be small under the code for IT consulting but other than small under the code for software development, even though it does both. Knowing which of your codes qualifies under each opportunity’s size standard is essential before writing a proposal.
Affiliate Receipts
If your company has affiliates, the SBA adds together the average annual receipts of all affiliated entities in determining size. Affiliates count whether they’re domestic or foreign and whether they’re organized for profit.8eCFR. 13 CFR Part 121 – Small Business Size Regulations For a recent acquisition, the acquired firm’s receipts count for the full measurement period, not just the time after the deal closed. An acquisition can push you over a size standard overnight.
What Happens if You Pick the Wrong Code
A wrong code on a tax return mostly skews statistical data. A wrong code used to win a federal set-aside is a different problem. Willfully misrepresenting size status to obtain a small-business set-aside can trigger suspension or debarment from federal contracting, and the SBA presumes a loss to the United States equal to the entire contract amount whenever a non-small business is found to have won a set-aside through misrepresentation.10eCFR. 13 CFR 121.108 – What Are the Penalties for Misrepresentation of Size Status
False Claims Act liability adds civil penalties of $14,308 to $28,619 per false claim plus treble damages, reducible to double damages only if the violator self-reports within 30 days and fully cooperates.11Office of the Law Revision Counsel. 31 US Code 3729 – False Claims Criminal penalties under the Small Business Act and federal fraud statutes apply to knowing misrepresentations.10eCFR. 13 CFR 121.108 – What Are the Penalties for Misrepresentation of Size Status
Codes can also be challenged. A competitor, or you, can appeal a solicitation’s assigned NAICS code to the SBA’s Office of Hearings and Appeals. The filing window is short: 10 calendar days from issuance of the solicitation, received by 5:00 p.m. ET on the tenth day. If an amendment changes the code, the clock resets.12U.S. Small Business Administration. NAICS Appeals Solid documentation of your revenue breakdown by activity is what makes an appeal or a size protest viable.
Revisit Your Codes on the Revision Cycle
The NAICS structure is revised every five years. The current version is 2022 NAICS, and the Census Bureau has scheduled the next update for January 2027.13U.S. Census Bureau. Schedule for 2027 Revision of NAICS When industries get split, merged, or redefined, update your SAM.gov entry and confirm the new codes still align with the size standards you rely on. An obsolete code can leave you invisible to solicitations that use the current one.