Labor Codes do not matter in reporting the income of your corporation. Labor codes matter when determinng Workman Compensation Insurance liability thresholds. Your S-Corporation may have different divisions and different areas of business which would lhave various labor codes throughout its life time. Keeping those corporation divisions separate is essential to running your corporation efficiently and liability insurance costs low. It is recommended, but not a tax requirement.
What does matter is that you have the correct Business Code (NAICS - North American Industry Classification System) the IRS asks for in the upper left hand corner of your 1120-S return when filing. This is for US Census information more than anything else. The tax return will often error code without this information.
We recommend you chose a broad code if your corporation is working in an industry area that will utilize several niche markets.
