Indiana lesson 5 of 6
Indiana state taxes, licences and permits
Indiana has no LLC franchise tax, but resident members still owe state and county income tax on their share of profit, and Indiana adds a county income tax on top of the state rate that varies by where the member lives.
Income tax on members
By default an LLC's profit passes through to its members, who report it on their personal returns. Indiana residents pay the state's flat personal income tax rate plus a county income tax, so the effective rate depends on which county a member lives in, not where the business operates.
Registering for other state taxes
If you sell taxable goods or services, register for sales tax through the BT-1 on INBiz. If you have employees, the same registration covers Indiana withholding, and you separately register with the Department of Workforce Development for unemployment insurance.
Indiana has no statewide general business licence. Licensing depends on your industry and, in many cases, your city or county, so check with the relevant local government as well as any state licensing board.
Key takeaways
- There is no LLC franchise tax in Indiana, but resident members owe state and county income tax on pass-through profit.
- County income tax rates vary, so a member's home county affects the total rate.
- There is no statewide business licence; check industry and local requirements separately.
Frequently asked questions
Does Indiana tax LLC profit at the entity level?
Not by default. A standard LLC is a pass-through entity for tax purposes. If the LLC elects to be taxed as a C corporation, Indiana's flat corporate income tax applies instead.
Official sources
Or let us file your Indiana LLC for you
Everything above is yours to use for free. If you would rather hand it over, we prepare and file the Articles of Organization, act as your registered agent, and track your ongoing deadlines.
Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team