The rate is different for wholesales and retailers. How are wholesaler and retailer defined?
Wholesale and retail trade are defined in the Margin Tax law by referring to definitions in the 1987 Standard Industrial Classification (SIC) Manual published by the federal Office of Management and Budget. The SIC classification system divides industry into 10 divisions. Entities in Division F are considered wholesalers. Entities in Division G are considered retailers. Due to the way the classification system works, an entity with a SIC code in the 5000’s is a wholesale or retail entity. Note that while this includes the businesses that yo traditionally think of as service business like law firms and accountants, it also includes businesses such as bars and restaurants, car dealerships, gasoline service stations, mail-order houses, and vending machine operators. (The SIC code was replaced as the U.S. standard by the North American Industrial Classification System (NAICS) in 1997. However, the Margin Tax law refers to the older SIC system, not NAICS.) The law says the entity must be “p
