For kind-of-business classifications where there are substantial numbers of taxable and tax-exempt establishments, establishments are classified based on the federal income tax filing requirement for the establishment or organization. This classification was based primarily on the response to an inquiry on the census questionnaire. Establishments that indicated that all or part of their income was exempt from federal income tax under provisions of section 501 of the Internal Revenue Service (IRS) code are classified as tax-exempt; establishments indicating no such exemption are classified as taxable. All government-operated hospitals are classified as tax-exempt. For establishments without a report form, the tax status classification was based upon the type of tax return filed by the firm or organization.

For selected kind-of-business classifications that are comprised primarily of tax-exempt establishments, all establishments in those classifications are defined as tax-exempt. All establishments in the remaining kind-of-business classifications (comprised primarily of taxable establishments) are defined as taxable.