Indiana rarely gets mentioned as a cheap state to run an LLC in, but the numbers back it up: a low filing fee, no franchise tax, and a compliance report that only comes around every other year instead of every single one. Here's the full picture for starting a business there in 2026.
1. Which business structure fits you?
Most Indiana founders are deciding among four structures, and the decision usually comes down to liability tolerance.
- Sole proprietorship. Legally indistinguishable from you, with no filing needed to start — but every dollar the business owes is a dollar you owe personally too.
- Partnership. The same exposure as a sole proprietorship, just shared between two or more people running the business jointly.
- LLC. What most small Indiana businesses choose, since it separates your personal assets from whatever debts or lawsuits the business faces.
- Corporation, S-corp or C-corp. More formal, more paperwork, and generally worth the extra work once investors or multiple shareholders come into play.
Our business structure guide walks through the comparison in more depth.
LLCs and corporations register with the Indiana Secretary of State via the INBiz portal, which handles business filings across the state. Sole proprietorships and general partnerships have nothing to register there.
2. Register your business
Forming an LLC
Articles of Organization filed through INBiz are what create your Indiana LLC. The fee runs $95 online or $100 by mail, and online filings are usually approved within about a business day — among the fastest turnaround times in the country.
A registered agent with a physical Indiana address, available during business hours, is required for every LLC — you can act as your own or hire a commercial service.
Indiana law doesn't require an operating agreement, but writing one is worthwhile anyway, especially with more than one member, since it's what actually governs how decisions and profits get split.
Sole proprietorships and DBAs
Sole proprietorships don't file anything with the Secretary of State. Operating under a trade name means registering it with the county recorder where the business operates, and both the fees and the specific rules vary from county to county.
3. Get an EIN
An Employer Identification Number comes free from the IRS, and the online application generally takes about 15 minutes. Opening a business bank account, hiring anyone, or filing most business tax forms all require one, even for a single-member LLC with no employees.
4. Check licenses and permits
There's no single statewide business license in Indiana either. Requirements instead depend on your industry and city: regulated professions need their own licensing, some cities impose local permits, and selling taxable goods requires a Retail Merchant Certificate from the Department of Revenue. Our guides on professional licensing by industry and zoning laws for home businesses go into more detail.
5. Understand Indiana taxes
Indiana's flat personal income tax rate sits at 2.95% for 2026, one of the lowest flat rates nationally, with a further scheduled drop to 2.90% in 2027. Every one of the state's 92 counties adds its own local income tax on top, anywhere from roughly 0.5% to over 3%, so your total effective rate hinges a lot on where your business is based.
Sales tax is a flat 7% across the entire state, with no local additions layered on — one of the simpler sales tax setups anywhere, regardless of where in Indiana you sell.
6. Stay compliant
Rather than filing annually, Indiana LLCs file a Business Entity Report every two years, due by the last day of the LLC's anniversary month in whichever year it's owed. It costs $32 online or $50 by mail. Because the deadline only comes around every other year, it's easy to forget — a standing calendar reminder helps. There's no immediate late fee, but the LLC is marked "delinquent" after 60 days, and continued non-filing can eventually lead to administrative dissolution.
Indiana business costs at a glance
| Item | Cost |
|---|---|
| Articles of Organization (LLC) | $95 online / $100 mail |
| Business Entity Report (every 2 years) | $32 online / $50 mail |
| Registered agent service (optional) | $100 to $200/year |
| EIN | Free (IRS) |
| State income tax | 2.95% flat + county tax (0.5% to 3%+) |
| State sales tax | 7% flat, no local add-on |
Frequently asked questions
How often do Indiana LLCs file compliance reports?
Every two years rather than annually — it's called the Business Entity Report.
How much does it cost to form an LLC in Indiana?
$95 online, $100 by mail, and online approval usually comes back within about a business day.
What's the personal income tax rate in Indiana?
A flat 2.95% in 2026, on top of which each county adds its own tax, roughly 0.5% to over 3% depending on location.
Does sales tax vary by city in Indiana?
It doesn't — the rate is a flat 7% everywhere in the state, with no local additions.
How much does Indiana's Business Entity Report cost?
$32 online or $50 by mail, due by the last day of your LLC's anniversary month in the year it's owed.
Fees and rates above come from the Indiana Secretary of State and Department of Revenue as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to an Indiana-licensed attorney or CPA about your specific situation.