The number of businesses without paid employees in the U.S. reached 22.7 million in 2012, up 1.1 percent from 2011, according to statistics released today by the U.S. Census Bureau. This marks the third straight annual increase in nonemployer businesses, which are businesses with no paid employees, annual business receipts of $1,000 or more ($1 or more in the construction sector) and are subject to federal income taxes.

      Nearly all industry sectors that make up nonemployer businesses experienced growth in the number of establishments and receipts, according to findings from the report released today. Nonemployer Statistics: 2012 includes data on nearly 450 industries in metropolitan areas, counties, states and nationwide.

      “Nonemployer businesses represent entrepreneurship in perhaps its purest form, including the classic ‘mom and pop’ shops and people running businesses out of their homes,” said William Bostic Jr., the associate director for economic programs at the Census Bureau.

      This release covers 19.6 million sole proprietorships, 1.4 million corporations and 1.7 million partnerships, which account for the total number of nonemployer businesses.

      Florida had the largest increase in nonemployer businesses, with 57,978 added in 2012. California (39,051), Texas (38,504) and New York (15,207) had the next highest increases. California still had the largest number of nonemployer businesses with 2.9 million.

      Among counties, Los Angeles County, Calif., added the most nonemployer businesses (17,741). Miami-Dade County, Fla. (13,842), Broward County, Fla. (9,132), Harris County, Texas (7,372) and Orange County, Calif. (5,909) had the next largest increases.

      Nearly all industry sectors saw growth, with the retail trade sector gaining the largest number of establishments, adding 57,154 in 2012 (a 3.1 percent increase). The construction sector, however, declined by 41,171 establishments (a loss of 1.7 percent), and the health care and social assistance sector lost 25,071 establishments (a loss of 1.3 percent).

Other highlights:

Nation

·         Total annual receipts for nonemployer businesses were $1.0 trillion in 2012, an increase of $41.3 billion from 2011. There has been a continued increase in the number of nonemployer businesses since 2009 when there were 21.7 million locations reported.

States

·         California had the highest total receipts, with $149.4 billion. Texas had the second highest receipts with $97.1 billion, followed by New York with $77.4 billion.

·         Florida had the highest percentage increase in the number of nonemployer locations at 3.4 percent. Hawaii (3.2 percent), the District of Columbia (2.8 percent) and Louisiana (2.8 percent) followed.

Counties

·         Los Angeles County, Calif., showed the largest total nonemployer receipts with $47.2 billion in 2012.

·         Travis County, Texas, up 9.1 percent from 2011, had the largest percent increase in receipts. Gwinnett County, Ga. (8.3 percent), Miami-Dade County, Fla. (8.2 percent), Dallas County, Texas (7.8 percent) and Clark County, Nev., (7.8 percent) followed.

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Nonemployer statistics originate from Internal Revenue Service tax return information. The data are subject to nonsampling error, such as errors of self-classification by industry on tax forms, as well as errors of response, nonreporting and coverage. Values provided by each firm are slightly modified to protect the respondent's confidentiality. Further information about methodology and data limitations is available at <http://www.census.gov/econ/nonemployer/methodology.htm>.

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Rosa Rendon

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email: <pio@census.gov>