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Business Expenses

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Definitions

  • All Other Operating Expenses - Operating expenses not reported elsewhere, such as bank card charges, motor fuel, and travel expense. Excluded are purchase of products for resale (cost of goods sold); bad debt; transfers made within the company; capitalized expenses; interest; impairment; income, sales, and excise taxes; and other non-operating expenses.
  • Annual Payroll - The gross earnings of all employees paid during the calendar year (cash basis). It includes all forms of compensation, such as salaries, wages, commissions, dismissal pay, bonuses, vacation and sick leave pay, and compensation in kind, prior to such deductions as employees' social security contributions, withholding taxes, group insurance, union dues, and savings bonds. The total includes salaries of officers of corporations; it excludes payments to proprietors or partners of unincorporated concerns. The Census definition of payroll is identical to that recommended to all Federal statistical agencies by the U.S. Office of Management and Budget, in particular, the definition used on the Employer's Quarterly Federal Tax Return, Treasury Form 941. This definition does not include employers' social security contributions or other nonpayroll labor costs, such as employees' pension plans, group insurance premiums, and workers' compensation. Data presented on annual payroll are sample-based and include payroll of enterprise support locations, such as retail warehouses and central administrative offices, and thus may not match payroll data compiled in the 2007 Economic Census.
  • Auxiliary Facilities - Also known as enterprise support units of a reporting company, these are primarily engaged in furnishing supporting services to the company's operating units, such as warehouses, central administrative offices, garages, and repair services.
  • Capitalized Expenses - Also known as capital expenditures, this includes all expenditures during the year for both new and used structures and equipment chargeable to asset accounts for which depreciation or amortization accounts are ordinarily maintained. Also included are capitalized leasehold improvements and capitalized interest charges on loans used to finance capital projects.
  • Commissions - Commissions paid to other firms or independent contractors, including payments by wholesalers to other firms for commissioned sale of merchandise. This item excludes commissions paid to the firm's own employees (included in payroll) and commissions paid by wholesale agents and brokers.
  • Contract Labor Costs - Payments to other firms for the contractual use of their employees. These employees are supplied by other firms to perform specific jobs, and include temporary help and leased employees. Day-to-day supervision is provided by the purchasing firm. For example, contractual costs for security and janitorial personnel are excluded if supervised by the supplying firms, but are included in data compiled on other operating expenses.
  • Cost of Goods Sold - Beginning inventory plus purchases of goods for resale minus ending inventory.
  • Data Processing and Other Purchased Computer Services - Computer facilities management services, computer input preparation, data storage, computer time rental, optical scanning services, and other computer-related advice and services, including training.
  • Depreciation and Amortization Charges - Depreciation charged against tangible assets owned and used by a firm, tangible assets and improvements owned by a firm within leaseholds, and tangible assets obtained through capital lease agreements. This item also includes amortization charges against intangible assets (i.e., goodwill, patents, copyrights, etc.). Excluded from this item is accumulated depreciation.
  • Employer's Cost for Fringe Benefits - Expenditures made by the employer for legally required and voluntary fringe benefit programs for employees. Legally required fringe benefits includes all programs required under Federal and State legislation such as FICA, unemployment tax, workers' compensation, and state disability payments. Voluntary fringe benefits includes programs not specifically required by Federal or State legislation, such as life and health insurance premiums for employees; costs incurred under defined contribution plans such as profit sharing; and costs incurred for both qualified and unqualified defined pension plans.
  • Employer Identification Number - A nine-digit number used by the Internal Revenue Service for any legal entity that is required to file a federal tax return.
  • Establishment - A single physical location where business is conducted, or where services are performed.
  • Expensed Equipment - Expensed computer hardware and other equipment (e.g., copiers, fax machines, telephones, shop and lab equipment, CPU's, and monitors). Excluded are expenditures for capitalized equipment; for software expenses; for leased and rented equipment; and depreciation for capitalized equipment.
  • Expensed Purchases of Software - Purchases of prepackaged, custom coded, or vendor customized software including software developed or customized by others, web design services and purchases, licensing agreements, upgrades of software; and maintenance fees related to software upgrades and alterations.
  • Firm - A business organization or entity consisting of one or more domestic establishment locations under common ownership or control.
  • Fringe Benefits - Expenditures made by the employer for legally required and voluntary fringe benefit programs for employees. Legally required fringe benefits includes all programs required under Federal and State legislation such as FICA, unemployment tax, workers' compensation, and state disability payments. Voluntary fringe benefits includes programs not specifically required by Federal or State legislation, such as life and health insurance premiums for employees.
  • Governmental Taxes and License Fees - Payments to governmental agencies for taxes and licenses, business and property taxes and excludes income taxes, and sales and excise taxes collected from customers.
  • Imputation - The procedure for determining a value for a specific data item where the response is missing or unusable.
  • Interest Expense - Interest expense incurred in the financing of operations and long lived assets used in continuing operations, and excludes transfers made within the company and capitalized interest. For kinds of business covered in this survey, interest is not considered a type of operating expense.
  • Lease and Rental Payments for Land, Buildings, Structures, Store Space and Offices - Payments made to other companies for the rental or leasing of land, buildings, offices and related structures and includes penalties incurred for broken leases.
  • Lease and Rental Payments for Machinery, Equipment, and Other Tangible Items - Payments made to other companies for the rental or leasing of machinery and equipment. Costs for the rental and leasing of computer software are excluded.
  • Operating Expenses, Total - The sum of detailed types of expenses. It excludes cost of goods sold; income, sales, and excise taxes; capital expenditures; funds invested; and interest expense. The detailed expenses are listed below:
      Annual payroll before deductions
      Employer's cost for fringe benefits
      Contract temporary staff and leased employee expense
      Expensed equipment
      Purchases of packaging materials and containers
      Purchases of other materials, parts, and supplies (not for resale)
      Commissions expense
      Expensed purchases of software
      Data processing and other purchased computer services
      Purchased communication services
      Purchased repairs and maintenance to machinery and equipment
      Purchased repairs and maintenance to buildings, structures, and offices
      Lease and rental payments for machinery, equipment, and other tangible items
      Lease and rental payments for land, buildings, structures, store space, and offices
      Purchased electricity
      Purchased fuels (except motor fuels)
      Water, sewer, refuse removal, and other utility payments
      Purchased transportation, shipping and warehousing services
      Purchased advertising and promotional services
      Purchased professional and technical services
      Depreciation and amortization charges
      Governmental taxes and license fees
      All other operating expenses
  • Purchased Advertising and Promotional Services - Cost of purchases of advertising, marketing and public relations services.
  • Purchased Communication Services - Cost of purchased telephone, cellular, and fax services; computer-related communications (e.g., Internet, connectivity, online); and other wired and wireless communication services.
  • Purchased Electricity - Cost of electricity paid directly to the utility company and excludes the cost of electricity within lease or rental payments.
  • Purchased Fuels (Except Motor Fuels) - Cost of fuels for heating, power, or generation of electricity. It does not include fuel for motor vehicles. It excludes the cost of fuel within lease or rental payments.
  • Purchased Packaging and Containers - Purchases of containers, wrapping, packing and selling supplies used in packaging, processing, shipping, and selling of goods.
  • Purchased Professional and Technical Services - Management consulting, accounting, auditing, bookkeeping, legal, actuarial, payroll processing, architectural, engineering, and other professional services. This excludes salaries paid to a firm's own employees for these services.
  • Purchased Repairs and Maintenance to Buildings, Structures, and Offices - Noncapitalized repairs of and maintenance to buildings, structures, storefronts, and offices. Extensive repairs or reconstruction that were capitalized are considered capital expenditures and are, therefore, excluded from this item. Costs for repair and maintenance provided by an owner as part of a rental contract or incurred directly by an establishment in using its own work force are also excluded.
  • Purchased Repairs and Maintenance to Machinery and Equipment - Cost of all non-capitalized repairs and maintenance to machinery and equipment.
  • Purchased Transportation, Shipping, and Warehousing Services - Cost of purchased postage, shipping or delivery services, or warehousing storage. Also included is the cost of purchased transportation services.
  • Purchases of Other Materials, Parts, and Supplies (Not for Resale) - Cost of other supplies, materials and parts purchased for a firm’s own use. This item excludes computer supplies (and packaging supplies purchased by wholesalers and retailers), and the cost of goods purchased for resale.
  • Receipts/Revenue for Service Industries:
    • Receipts/Revenue (for firms subject to payment of federal income tax) - For businesses using accrual-based accounting, this includes the total amounts received from customers or clients for services rendered and merchandise sold during the calendar year whether or not payment was actually received during the year regardless of when services were rendered. Receipts do not include sales, occupancy, admissions, or other taxes collected from customers and remitted directly by the firm to a local, state or federal tax agency.
    • Revenue (for organizations exempt from federal income tax) - Revenue includes charges or billings to customers or clients for services rendered and merchandise sold during the calendar year whether or not payment was actually received during the year. Also, included are income from interest, dividends, contributions, gifts and grants, rents, royalties, dues and assessments form members and affiliates, and net receipts from fund-raising activities. Receipts from these organizations' taxable business activities, as well as tax-exempt activities, are included.
  • Reporting Unit - Subsidiaries, divisions or other operating units of the EIN or company sampling unit separately identified on the database for purposes of collecting data from each individual part. If all data for a sampling unit are obtained from one location, the sampling and reporting unit records are equivalent.
  • Sales For Merchant Wholesale and Retail Trades and Accommodations and Food Services - This is the measure of economic output for covered trades. This item includes: goods and merchandise sold for cash or credit; receipts for accommodations services; receipts from customers for freight, installation, maintenance, repair, alteration, storage, and other services; excise taxes which are levied on the manufacturer and included in the cost of goods purchased by wholesalers; subsidy payments received for the sale of goods; gross value of sales made on a commission basis; and the sales of goods which are shipped by a wholesaler.
  • Water, Sewer, Refuse Removal and Other Utility Payments - Cost of purchased services for water, sewage, trash, and utilities not included elsewhere. It excludes costs covered within lease and rental payments.

Source: U.S. Census Bureau | Business Expenses | (888) 211-5946 |  Last Revised: March 02, 2012