There was a major change introduced into the organization of the PPI Table 9 codes by the Bureau of Labor Statistics (BLS) starting with the July 2009 PPI Detailed Report. There has been an addition of services table 9 codes in the Producer Price Indexes. Prior to that time, the Table 9 codes were organized using 15 different 2-digit codes (first two digits of all codes) representing 15 different commodity types. In July 2009, the BLS added numerous “Wherever-Provided Service” PPI Table 9 codes. These new service PPI Table 9 codes have 2-digit codes of 30 through 80. This is a link to pages 8 and 9 from the July 2009 PPI Detailed Report entitled “PPI Introduces Wherever-Provided Services and Construction Indexes” that describes the new organization of Table 9:
All taxpayers that use the IPIC LIFO method provided for by IRS Regulations that are not retailers (retailers can use either CPI or PPI indexes) must use PPI indexes.
IRS Reg. Sec. 1.472-8(e)(3)(iii)(B)(2) reads as follows: ” (2) BLS table selection. Manufacturers, processors, wholesalers, jobbers, and distributors must select BLS price indexes from Table 9 (Producer price indexes and percent changes for commodity groupings and individual items, not seasonally adjusted) of the ”PPI Detailed Report”, unless the taxpayer can demonstrate that selecting BLS price indexes from another table of the ”PPI Detailed Report” is more appropriate.”
In the many years in which we have provided IPIC LIFO method software and IPIC method consulting services, very seldom have we found there to be PPI Table 11 or any other PPI table codes which are more appropriate for an inventory item than a Table 9 code because almost all Table 11 codes also have a Table 9 code for that specific inventory item or there is a very close correlation.
The reason that the IRS specifies that only PPI Table 9 codes should be used to calculate LIFO indexes is that Table 9 categories are commodity price indexes. The title of the PPI Table 11 is “Producer price indexes for the net output of selected industries and their products”, so this table is primarily industry based. The title of the PPI Table 9 is “Producer price indexes for commodity and service groupings and individual items, not seasonally adjusted”.
Because LIFO is an inventory accounting method, it follows that the IRS requires the use of the commodity based PPI Table 9 indexes rather than the industry based indexes except for the rare cases for which a Table 11 code is more appropriate than any Table 9 code for an inventory item.
Wherever-Provided Services BLS News Release
Effective with the changes in the organization of the Table 9 codes in July 2009, all of the pre-July 2009 Table 9 codes with 01 through 15 2-digit codes that were considered to be service codes were reassigned (“recoded” is the term used by the BLS) to codes with 2-digit codes of 33 through 80.
We believe there have been a small number of 093 Publications, printed matter and printing material 3-digit codes that may have been used for LIFO purposes. Shown below is a table listing these codes.
The left columns of the table below are PPI Table 9 commodity codes for newspaper, periodical and book publishing included with 093 3-digit codes until July 2009. These codes were reclassified or recoded as services and are included in that section of Table 9 now with a 33 2-digit code for Publishing sales. If any of these codes were used for LIFO purposes before July 2009, the proper codes to use after that time are shown in the right columns.
| Codes discontinued starting July 2009 | New codes to use starting July 2009 | ||
|---|---|---|---|
| 093 | Publications, printed matter & printing mat’l | 094 | Publications, printed matter & printing mat’l |
| 0931 | Circulation | 094701 | Magazine and periodical printing |
| 093101 | Newspapers | 094701 | Magazine and periodical printing |
| 09310101 | Daily & Sunday newspapers (subscriptions and sales) | 094701 | Magazine and periodical printing |
| 09310105 | Weekly & other newspapers (subscriptions and sales) | 094701 | Magazine and periodical printing |
| 0932 | Periodicals | 094701 | Magazine and periodical printing |
| 093204 | Circulation | 094701 | Magazine and periodical printing |
| 09320401 | Periodicals, subscriptions and single copy sales | 094701 | Magazine and periodical printing |
| 0933 | Book publishing | 09440113 | Book printing |
| 093301 | Textbooks | 09440113 | Book printing |
| 09330101 | Textbook publishing, including teachers’ editions | 09440113 | Book printing |
| 093302 | Technical, scientific, and professional | 09440113 | Book printing |
| 09330201 | Technical, scientific & professional books | 09440113 | Book printing |
| 093303 | Religious books | 09440113 | Book printing |
| 09330301 | Religious book publishing | 09440113 | Book printing |
| 093304 | Mass market rack-size book publishing | 09440113 | Book printing |
| 09330416 | Adult trade and juvenile | 09440113 | Book printing |
| 09330417 | Book club and mail order book publishing | 09440113 | Book printing |
| 093305 | General reference books | 09440113 | Book printing |
| 09330501 | General reference book publishing | 09440113 | Book printing |
| 093308 | Other books, incl. music books & pamphlets | 09440113 | Book printing |
| 09330801 | Other book publishing, excluding pamphlets | 09440113 | Book printing |
| 09330802 | Pamphlet publishing (5 to 48 pages) | 09440113 | Book printing |
| 0936 | Greeting cards and misc. publishing | 09470609 | Other commercial general job printing |
| 093601 | Miscellaneous publishing | 09470609 | Other commercial general job printing |
| 09360104 | Greeting card publishing | 09470609 | Other commercial general job printing |
| 09360105 | All other publishing | 09470609 | Other commercial general job printing |
| 093602 | Directory and mailing list publishing | 09470609 | Other commercial general job printing |
| 09360201 | Directory and mailing list publishing | 09470609 | Other commercial general job printing |
The BLS has recoded all the codes included in the 0934 Book printing, 0937 Commercial printing and 0938 Blankbooks, binders, and bookbinding work 4-digit codes that existed prior to July 2009 so those indexes are no longer published and beginning in July 2009 all these codes were recoded as 0944, 0947 and 0948 4-digit codes, respectively. The table below shows the before and after July 2009 Table 9 codes for the printing codes.
| Table 9 093 3-digit Printing codes that were recoded as of July 2009 as 094 3-digit code | |||
|---|---|---|---|
| Codes discontinued starting July 2009 | New codes to use starting July 2009 | ||
| 0934 | Book printing | 0944 | Book printing |
| 093401 | Book printing | 094401 | Book printing |
| 09340113 | 09340113Book printing | 09440113 | Book printing |
| 0935 | Manifold business forms | 0945 | Manifold business forms |
| 093501 | Manifold business forms | 094501 | Manifold business forms |
| 09350101 | Unit set forms | 09450101 | Unit set forms |
| 09350102 | Manifold books | 09450102 | Manifold books |
| 09350103 | Custom continuous forms | 09450103 | Custom continuous forms |
| 09350104 | Stock continuous forms | 09450104 | Stock continuous forms |
| 0937 | Commercial printing | 0947 | Commercial printing |
| 093701 | Magazine and periodical printing | 094701 | Magazine and periodical printing |
| 09370102 | Lithographic | 09470102 | Lithographic |
| 09370103 | Gravure | 09470103 | Gravure |
| 093702 | Label and wrapper printing for packaging | 094702 | Label and wrapper printing for packaging |
| 09370201 | Letterpress | 09470201 | Letterpress |
| 09370202 | Lithographic | 09470202 | Lithographic |
| 09370203 | Gravure | 09470203 | Gravure |
| 09370205 | Flexographic | 09470205 | Flexographic |
| 093703 | Catalog and directory printing | 094703 | Catalog and directory printing |
| 09370302 | Lithographic | 09470302 | Lithographic |
| 09370303 | Gravure | 09470303 | Gravure |
| 09370304 | Letterpress | 09470304 | Letterpress |
| 093704 | Financial and legal printing | 094704 | Financial and legal printing |
| 09370402 | Lithographic | 09470402 | Lithographic |
| 093705 | Advertising printing | 094705 | Advertising printing |
| 09470501 | Letter Press | ||
| 09370502 | Lithographic | 09470502 | Lithographic |
| 09370503 | Gravure | 09470503 | Gravure |
| 093706 | Other general job printing | 094706 | Other general job printing |
| 09370601 | Letterpress | 09470601 | Letterpress |
| 09370602 | Quick printing | 09470604 | Quick printing |
| 09370603 | Gravure | 09470603 | Gravure |
| 09370609 | Other general job printing, n.e.c. | 09470609 | Other commercial general job printing |
| 093711 | Commercial printing, n.e.c. | 094711 | Commercial printing, n.e.c. |
| 09371101 | Screen printing, excluding textiles | 09471101 | Screen printing, excluding textiles |
| 09371102 | Engraving | 09471102 | Engraving |
| 09371103 | Digital printing | 09471103 | Digital printing |
| 09371104 | Flexographic printing | ||
| 09371106 | Flexographic printing | 09471106 | Flexographic printing |
| 0938 | Blankbooks, binders, and bookbinding work | 0948 | Blankbooks, binders, and bookbinding work |
| 093801 | Bankbooks, looseleaf binders, and devices | 094801 | Bankbooks, looseleaf binders, and devices |
| 09380101 | Blankbook making | 09480101 | Blankbook making |
| 09380102 | Looseleaf binders and devices | 09480102 | Looseleaf binders and devices |
| 093802 | Bookbinding and related work | 094802 | Bookbinding and related work |
| 09380201 | Edition, library and other hardcover book binding | 09480201 | Edition, library and other hardcover book binding |
| 09380202 | Other book and pamphlet binding | 09480202 | Other book and pamphlet binding |
For companies that use our LIFO-PRO software, the PPI index files that will include the December 2009 indexes which will be available on January 20, 2010 will include data which will automatically reassign any inventory balances entered into the Excel input schedule (year end FIFO or average cost balances by PPI code) to which a pre-July 2009 093 3-digit service code is assigned to the appropriate 094 3-digit code as shown in Table 1 above. The software will also automatically make the reassignments necessary for the codes shown in Table 2 above.
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