Indiana is one of the more overlooked cheap states to run an LLC in. The filing fee is low, there's no franchise tax, and the compliance report only comes around every other year instead of annually. Here's what it takes to start a business in Indiana in 2026.
1. Which business structure fits you?
Before you file anything, it helps to know what you're actually choosing between.
- Sole proprietorship. No filing required to start, and you and the business are legally the same entity. Simple, but you're personally liable for whatever the business owes.
- Partnership. Two or more people running a business together, with the same liability exposure as a sole proprietorship, just split across partners.
- LLC. The most common structure for small businesses in Indiana. It separates your personal assets from the business's debts and lawsuits.
- Corporation, either S-corp or C-corp. More paperwork and more formality, usually worth it once you're bringing on investors or multiple shareholders.
For a deeper comparison, see our guide on choosing a business structure.
LLCs and corporations register with the Indiana Secretary of State through the INBiz portal, the agency that handles business filings statewide. Sole proprietorships and general partnerships don't register there.
2. Register your business
Forming an LLC
You form an LLC in Indiana by filing Articles of Organization through INBiz. The filing fee is $95 online or $100 by mail, and online filings are typically approved within about a business day, one of the fastest turnarounds in the country.
Every LLC needs a registered agent with a physical Indiana address, available during business hours. You can act as your own agent, or hire a commercial service.
Indiana doesn't require an operating agreement by law, but it's still worth writing one, particularly for multi-member LLCs, to spell out how decisions and profits get split.
Sole proprietorships and DBAs
Sole proprietorships don't file with the Secretary of State. If you're operating under a trade name, you'll register it with the county recorder in the county where your business operates, and fees and rules vary by county.
3. Get an EIN
An Employer Identification Number is free straight from the IRS and takes about 15 minutes online. You'll need one to open a business bank account, hire anyone, or file most business tax forms, even if you're a single-member LLC with no employees.
4. Check licenses and permits
Indiana doesn't issue a single general statewide business license either. What you need depends on your industry and city: professional licensing for regulated fields, local permits in some cities, and a Retail Merchant Certificate from the Department of Revenue if you sell taxable goods. Our guides on professional licensing by industry and zoning laws for home businesses cover more of this.
5. Understand Indiana taxes
Indiana has a flat personal income tax rate of 2.95% for 2026, one of the lower flat rates in the country, and it's scheduled to keep dropping toward 2.90% in 2027. On top of that, every one of Indiana's 92 counties levies its own local income tax, ranging from roughly 0.5% to over 3%, so your total effective rate depends heavily on where you're based.
Sales tax is a flat 7% statewide, with no local additions, which keeps things simple no matter where in Indiana you're selling.
6. Stay compliant
Indiana LLCs file a Business Entity Report every two years, not annually, due by the last day of your LLC's anniversary month in the applicable year. The fee is $32 online or $50 by mail. It's easy to lose track of a deadline that only shows up every other year, so it's worth a standing calendar reminder. There's no immediate late fee, but the LLC becomes "delinquent" after 60 days, and continued non-filing can 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, not annually, called the Business Entity Report.
How much does it cost to form an LLC in Indiana?
$95 online or $100 by mail, with online filings typically approved within about a business day.
What's the personal income tax rate in Indiana?
A flat 2.95% for 2026, plus a county-level income tax ranging roughly 0.5% to over 3% depending on where you're based.
Does sales tax vary by city in Indiana?
No, it's a flat 7% statewide 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 applicable year.
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.