Zip codes: They’re an essential component to addresses, and you probably know yours by heart. But what do you actually know about them?
Zip stands for “Zone Improvement Plan” and relatively speaking, they’re a new development in the United States. The U.S. Postal Service implemented the five digit number in the early 1960s to “zip along” the sorting and delivery of mail. Prior, mailed traveled predominantly by train and mostly consisted of personal correspondence – a letter from your wife or a $2 birthday card, for instance.
Then businesses discovered mail and began to use mail for sales, marketing and yes – bills. That coupled with the introduction of the computer led to an explosion of direct mail from companies. The U.S. Post Office realized this was too much for their team members to tackle.
All that changed in July 1963.
When the post office launched its new zip program, it focused on using different transportation systems – i.e. the Interstate Highways. Sectional Center Facilities were born and served as distribution points for up to 150 surrounding post offices. Then the zip code as we know it today was born.
Makeup of Zip Codes
90210 is a classic example of a California zip code – and it starts with nine because California is one of the most western states. This first digit designates a general postal area where zero is the northeast and nine is the west coast.
The second two digitals represent one of the 450 SCFs. The remaining numbers help further localize the area.
The plus four – which many people don’t even know exists until a website geocodes the address – identifies a segment within the five-digital area. This can be a city block, office building or any distinct mail unit. Businesses addresses usually require these over home addresses.
As of 2015, approximately 43,000 zip codes exist. Postal codes represent delivery points and these can comprise of anything from contiguous streets in cities to rural dirt roads. Because of this, the numbers can change, but the effect is usually unnoticeable.
How Symmetry Uses Zip Codes
At Symmetry Software, we offer a unique service called Payroll Point to help professionals determine the correct withholding taxes on the state and local level. For states with complicated tax laws, like Ohio or Michigan, having a precise zip code is vital. Our solution helps “zip along” the payroll process through geocoding addresses with the help of Melissa Data. Even if you enter a normal five digit code (correctly or incorrectly), the full accurate address will appear – nine digit postal code and all.
These free resources should not be taken as tax or legal advice. Content provided is intended as general information. Tax regulations and laws change and the impact of laws can vary. Consult a tax advisor, CPA or lawyer for guidance on your specific situation.