Nonemployer Establishments Definitions: A nonemployer business is one that has no paid employees,
has annual business receipts of $1,000 or more ($1 or more in the construction
industries), and is subject to federal income taxes. Nonemployer businesses
are generally small, such as real estate agents and independent contractors.
Nonemployers constitute nearly three-quarters of all businesses, but they contribute
only about three percent of overall sales and receipts data. Nonemployers are
not included in the counts of establishments from Generally, an establishment is a single physical location
at which business is conducted or services or industrial operations are performed.
However, for nonemployers, each distinct business income tax return filed by
a nonemployer business is counted as an establishment. Nonemployer businesses
may operate from a home address or a separate physical 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. Scope and Methodology: Nonemployer statistics data originate chiefly from administrative records of
the Internal Revenue Service (IRS). Data are primarily comprised of sole proprietorship
businesses filing IRS Form 1040, Schedule C, although a small percentage 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. The 1997 Nonemployer Statistics is published as part of the 1997 Economic Census,
and key displays combine data for nonemployers and employers. Data are published
annually beginning with 1998, but without comparable employer data. More information: