The PSM standard does not apply to "retail facilities" (29 CFR 1910.119(a)(2)(i)), but the standard never defines "retail." For more than two decades OSHA filled that gap with a simple test: a facility qualified if it got more than half of its income from direct sales of the covered chemical to end users. In 2015 OSHA tried to replace that test with a narrower one, and in 2016 a federal appeals court threw the new policy out on procedural grounds. Today OSHA operates under a 2018 enforcement memo. The letters below trace that history so you can see where your facility stands, and why this is an area where you should get a current, site-specific opinion before relying on the exemption.
Where Things Stand Now
Apr 30, 2018 · Current enforcement policy
Memorandum: PSM Retail Exemption Enforcement Policy
Issued to OSHA Regional Administrators after the D.C. Circuit invalidated OSHA's 2015 retail interpretation (Agricultural Retailers Ass'n v. U.S. Dep't of Labor, 837 F.3d 60 (D.C. Cir. 2016)). OSHA states it will not issue PSM citations to employers in three NAICS codes: 424510 (grain and field bean merchant wholesalers), 424590 (other farm product raw material merchant wholesalers), and 424910 (farm supplies merchant wholesalers). Those employers must still comply with other standards, including 1910.111 for anhydrous ammonia. For all other industries, compliance officers are told to exercise enforcement discretion based on the 1992 PSM preamble, which reasoned that retail chemicals come "in small volume packages, containers and allotments, making a large release unlikely."
Read the OSHA memo ↗
The Earlier "More Than 50%" Test
Both letters below are now marked by OSHA as archived ("may no longer represent OSHA Policy"). They are still the clearest statement of how OSHA applied the exemption before 2015, and many facilities still use the same reasoning.
Dec 12, 2005 · Archived
Clarification of the retail facilities exemption: which income counts
Asked about a company warehousing chlorine and sulfur dioxide cylinders, OSHA explained that the 50% test applies to income from sales of the PSM-covered chemical only, not the facility's total sales. OSHA's example: a seller earning 60% of its income on the chemical from a chain of supply stores and 40% from homeowners does not qualify, because the supply stores are not end users. Income from other, non-covered products is not part of the calculation.
Read OSHA Letter ↗
Jan 26, 2001 · Archived
Retailer exemption for anhydrous ammonia dealers
A fertilizer dealer sold about 75% of its anhydrous ammonia directly to farmers and 25% to wholesalers. OSHA found the covered process exempt because more than half of the income came from direct sales to end users. OSHA also noted that a clean accident record "is not a criteria which is used to determine PSM coverage."
Read OSHA Letter ↗
⚡ Key Compliance Takeaway
The retail exemption is one of the least settled areas of PSM. Under the archived guidance, the test was whether more than half of your income from the covered chemical came from direct sales to end users; sales to other businesses for resale did not count. Since 2018, OSHA has not cited three farm-supply wholesale NAICS codes and applies discretion everywhere else. If your PSM coverage depends on this exemption, document your sales mix for the covered chemical, confirm your state plan's position, and get a current written opinion. Do not rely on a retail label alone.
