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Pay Attention to the NAICS 2022 Revisions

The U.S. Small Business Administration (SBA) has proposed revisions to its small business size regulations to incorporate the U.S. Office of Management and Budget's (OMB's) North American Industry Classification System (NAICS) revision for 2022 (NAICS 2022), into its table of small business size standards. You should review these revisions to note any changes in your NAICS code, and to determine whether your company's size may have changed.

The NAICS 2022 revision established 111 new industries by reclassifying, combining, or splitting 156 NAICS 2017 industries or parts of industries. SBA's proposed size standards for these 111 new industries under NAICS 2022 would result in an increase to the size standards for 21 industries and 27 parts of three industries from NAICS 2017, a decrease to size standards for seven industries and 41 parts of one industry, a change in the size standard measure from average annual receipts to number of employees for one industry, a change in the size standard measure from number of employees to average annual receipts for a part of one industry, and no change in size standards for 118 industries and 33 parts of eight industries.

A major change involves the elimination of the the store/nonstore distinction for retailers.  Online retailers were under Subsector 454, Nonstore Retailers, which included, for example, NAICS 454110 (Electronic Shopping and Mail-Order Houses) with a size standard of $41.5 million.  Subsector 454 has been eliminated. The distinction between online and retail industries has been eliminated.  If, for example, you were an online furniture retailer, you will no longer be classified under 454110, with a size standard of $41.5 million.  Instead, you will be classified under 449110, Furniture Retailers, with a size standard of $22.0 million.

SBA proposes to adopt the updated table of size standards, effective October 1, 2022. Interested parties must submit comments no later than August 4, 2022.


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