Does gross square footage include exterior walls?

Yes. Gross square footage is measured to the outside face of the exterior walls, so the walls are part of the total. Gross living area under ANSI Z765 works the same way.

On a typical framed house the exterior walls are 6 to 8 inches thick once you count siding and drywall. On a 40 by 30 foot house that adds roughly 80 to 100 square feet compared with measuring inside each room. Brick or stone walls add more.

ANSI uses the exterior because it is the one boundary two measurers can find the same way. Adding up room sizes misses the walls, closets, and halls, which is why a room-by-room total always comes out smaller than the appraisal. Condo units are the main exception: Fannie Mae has appraisers measure them from the interior of the unit.