Comparison
Indiana LLC vs. Illinois LLC — head to head
All figures verified against official state portals as of 2026-05-08.
| Factor | Indiana (IN) | Illinois (IL) |
|---|---|---|
| Formation filing fee | $98 online / about $100 paper | $150 |
| Annual SOS/report fee | $50 biennial Business Entity Report | $75/year Annual Report |
| Five-year state filing cost | ~$248 | ~$525 |
| State income tax / owner tax | Indiana individual adjusted gross income tax was 3.05% for 2024 and scheduled to 3.00% in 2025; county local income taxes also apply. | 4.95% individual income tax; partnership/S-corp LLCs also face 1.5% Personal Property Replacement Tax on net Illinois income. |
| Chicago to Northwest Indiana migration | Indiana wins only when operations actually move into Indiana; otherwise county tax and foreign qualification still need modeling. | Illinois remains the right registration for Chicago offices, employees, inventory, and recurring Illinois customers. |
| Franchise, replacement, or gross-receipts tax | No statewide gross-receipts tax comparable to Ohio CAT for ordinary LLC pass-through income. | No classic franchise tax; Illinois PPRT applies to partnership/S-corp LLC net income and Cook County/Chicago taxes may add local layers. |
| Operating-state recommendation | Best low-tax Midwest choice for Chicago-to-Northwest-Indiana and Indianapolis operators. | Best when Illinois is the real operating state; avoid foreign qualification and Chicago-area nexus risk. |
| Foreign qualification risk | A Indiana LLC operating in Illinois may need Illinois foreign qualification, tax registration, and an in-state registered agent. | A Illinois LLC operating in Indiana may need Indiana foreign qualification, tax registration, and an in-state registered agent. |
| Publication requirement | None | None |
| Filing portal | INBiz | Illinois SOS LLC online filing |
| Best fit | Best low-tax Midwest choice for Chicago-to-Northwest-Indiana and Indianapolis operators. | Best when Illinois is the real operating state; avoid foreign qualification and Chicago-area nexus risk. |
Indiana totals about $248 over five years using $98 plus three $50 biennial reports. Illinois totals about $525. Indiana saves about $277 in SOS fees before the larger 3.05%/3.00% vs. 4.95% owner-tax spread and Illinois PPRT are considered.
Five-year state-fee delta
IN vs. IL carrying cost
Registered agent service excluded because it usually applies in either state.
| Year | Indiana | Illinois |
|---|---|---|
| Year 1 | ~$148 | ~$225 |
| Year 2 | ~$148 | ~$300 |
| Year 3 | ~$198 | ~$375 |
| Year 4 | ~$198 | ~$450 |
| Year 5 | ~$248 | ~$525 |
Indiana annual obligations
What a Indiana LLC must file each year
- Due date
- Business Entity Report due every two years in the anniversary month; $50 for-profit fee commonly cited for paper filings, lower online fee schedules may apply.
- Fee
- $50 biennial Business Entity Report
- What to file
- Business Entity Report due every two years in the anniversary month; $50 for-profit fee commonly cited for paper filings, lower online fee schedules may apply.
- Failure consequence
- Late filings can trigger fees, loss of good standing, administrative dissolution, or tax collection consequences depending on the filing.
- Filing portal
- Indiana annual filing portal
Illinois annual obligations
What a Illinois LLC must file each year
- Due date
- Annual Report due before the first day of the anniversary month; $75 domestic report ($250 foreign LLC report).
- Fee
- $75/year Annual Report
- What to file
- Annual Report due before the first day of the anniversary month; $75 domestic report ($250 foreign LLC report).
- Failure consequence
- Late filings can trigger fees, loss of good standing, administrative dissolution, or tax collection consequences depending on the filing.
- Filing portal
- Illinois annual filing portal
Indiana name rules
LLC name requirements in Indiana
- Required designators include LLC, L.L.C., or Limited Liability Company.
- Name must be distinguishable in Indiana SOS records.
- Business Entity Report is biennial, not annual.
- Search INBiz/SOS records before filing.
Illinois name rules
LLC name requirements in Illinois
- Required designators include LLC, L.L.C., or Limited Liability Company.
- Name must be distinguishable on Illinois SOS records.
- Annual report is due before the anniversary month; foreign LLC annual report fee is higher than domestic.
- Search at the Illinois business entity database before filing.
City-specific guides
Indiana and Illinois LLC formation by city
State rules apply statewide; city guides cover local context and additional permits.
Registered agents
Registered agent requirements: Indiana vs. Illinois
| Requirement | Indiana | Illinois |
|---|---|---|
| Required | Yes | Yes |
| Who can serve | IN resident 18+ with in-state street address, or registered IN entity | IL resident 18+ with in-state street address, or registered IL entity |
| Self-serve allowed | Yes (address becomes public state record) | Yes (address becomes public state record) |
| Consent required | Registered agent with Indiana street address required. | Registered agent acceptance is captured in the filing; agent must maintain an Illinois office. |
| Commercial RA typical cost | $50–$150/yr | $50–$150/yr |
Decision framework
How to choose: Indiana vs. Illinois LLC
-
Start with the operating state Employees, offices, inventory, property, local licenses, and recurring in-state customers usually decide where the LLC must register. The cheaper formation state is not cheaper if it adds foreign qualification.
-
Compare Secretary of State fees IN: roughly $98 formation + $50 biennial report and a low flat state income tax. IL: $150 formation + $75 annual report, 4.95% individual tax, and 1.5% PPRT for partnership/S-corp LLCs. Indiana is the clearest Midwest state-tax delta when the business genuinely operates there.
-
Compare tax exposure Indiana: Indiana individual adjusted gross income tax was 3.05% for 2024 and scheduled to 3.00% in 2025; county local income taxes also apply. No statewide gross-receipts tax comparable to Ohio CAT for ordinary LLC pass-through income. Illinois: 4.95% individual income tax; partnership/S-corp LLCs also face 1.5% Personal Property Replacement Tax on net Illinois income. No classic franchise tax; Illinois PPRT applies to partnership/S-corp LLC net income and Cook County/Chicago taxes may add local layers.
-
Price foreign qualification before filing Model both directions: domestic formation in one state plus foreign registration, annual reports, tax filings, registered agent cost, and local licenses in the operating state.
-
Use corridor-specific facts Indiana wins both state filing cost and owner-level tax rate when Northwest Indiana is the real operating base.
-
File and calendar compliance After choosing the operating state, file through the official portal, obtain an EIN, adopt an operating agreement, set up payroll/tax accounts if needed, and calendar annual statements or reports.
Provenance
Statute basis & official sources
Last verified 2026-05-08.
Indiana Business Flexibility Act; Indiana Code Title 23; Indiana DOR income tax guidance; 805 ILCS 180; 35 ILCS 5; 30 ILCS 115/12; IRS check-the-box regulations for federal LLC classification; state revenue guidance linked below.
Why you need an LLC (either state)
- Operating without an LLC leaves personal assets exposed to business debts, leases, and lawsuits.
- Forming in the wrong state can create dual registered agents, dual annual filings, and avoidable foreign qualification.
- Ignoring state income tax, gross-receipts tax, replacement tax, local income tax, or city licensing can create penalties and loss of good standing.
- Banks and payment processors commonly require filed formation documents, EIN confirmation, and an operating agreement.
FAQ
Indiana vs. Illinois LLC — common questions
Is it cheaper to form an LLC in Indiana or Illinois?
Indiana totals about $248 over five years using $98 plus three $50 biennial reports. Illinois totals about $525. Indiana saves about $277 in SOS fees before the larger 3.05%/3.00% vs. 4.95% owner-tax spread and Illinois PPRT are considered.
Should I form where I live or where I work?
For most owner-operated LLCs, form where the business actually operates: where you work, have employees, hold inventory, lease space, or repeatedly serve local customers. Residence matters for owner-level tax, but business nexus drives registration.
Can I form in the cheaper state and operate across the border?
Yes, but you may need foreign qualification in the operating state. That usually means another filing fee, another registered agent, and the operating state taxes you were trying to avoid.
Do these states require newspaper publication?
No. Ordinary LLCs in these Midwest states do not have the New York/Nebraska/Arizona-style publication requirement.
Does state formation change federal LLC tax treatment?
No. A single-member LLC is disregarded by default and a multi-member LLC is a partnership by default unless it elects corporate taxation. State-level taxes and reports differ, but federal classification does not.
When is a two-state LLC structure worth it?
Usually only when operations are genuinely split, there is real property in both states, customers or employees create nexus in both states, or a legal/tax advisor has a specific reason for a holding/operating company structure.
§ A Building permits by city
§ B LLC formation guides
§ C Companion tools
Disclaimer: Informational only — not legal advice. LLC laws change; verify with a Indiana or Illinois business attorney or CPA before filing.