Indiana LLC vs Illinois LLC (2026)
Compare Indiana LLC vs Illinois LLC on filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
By Edmond Hui · Last updated: August 4, 2026
Verdict: Indiana wins for most businesses
For most Indiana-based businesses, forming locally in Indiana is the smarter choice. You avoid paying fees in two states and managing compliance in both. Illinois only makes sense if your business genuinely operates there, and even then the total costs deserve a hard look.
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| Factor | Indiana | Illinois |
|---|---|---|
| Filing Fee | $95 | $150 |
| Processing Time | Not published by the state | Not published by the state |
| Annual Report Fee | $32 | $75 |
| Annual Report Due | End of anniversary month (biennial) | Before 1st of anniversary month |
| State Income Tax | Yes | Yes |
| Anonymous LLC | Yes | No |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A, you're in your home state | $108 + registered agent ~$150/yr |
Full fee breakdown for either state: Indiana LLC cost and Illinois LLC cost.
Business Climate: Indiana vs Illinois
| Factor | Indiana | Illinois |
|---|---|---|
| 5-year business survival rate | 54.3% (#9 of 51) | 55.6% (#3 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +15.4% YoY (#20 of 51 by volume) | +7.7% YoY (#7 of 51 by volume) |
Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)
Compare LLC Costs: Indiana vs Illinois
Indiana
Illinois
Costs include every mandatory state charge: the filing fee, the report fee (annualised where a state files biennially), any state entity-level tax shown in its own row above, a one-time publication cost where a state requires publication, and any one-time registration charge a state requires before the LLC may trade. Annualising makes the 1, 3 and 5 year rows a cost of ownership rather than a payment schedule: a biennial state charges its whole report fee in the years it falls due and nothing in between. Entity-level taxes that only apply after a corporate election, or above an owner or income threshold, are excluded and flagged on the state's own cost page. New York's publication cost is carried at a $250 floor, roughly $200 of newspaper cost in a low-cost county plus the $50 Certificate of Publication fee. No county-clerk-designated New York City newspaper publishes a rate card, so the four-figure NYC estimates in wide circulation cannot be traced to a primary source and are not asserted here; budget for materially more than the floor if you file in a NYC county. Montana's annual report is free when filed by April 15 and $35 after, a waiver the Secretary of State applies at its discretion. Every fee was verified against the state's own fee schedule, statute, or revenue authority on 29 July 2026. Excludes registered agent and legal fees. For informational purposes only, not legal or tax advice.
Filing Fees & Formation Costs
Indiana charges $95 to form an LLC, while Illinois charges $150. Indiana is $55 cheaper upfront. The cost that usually gets overlooked: if you form in Illinois but operate in Indiana, you must also register as a foreign LLC in Indiana (a $108 filing) and maintain a registered agent in Illinois (typically around $150 per year). That puts the realistic first-year cost of the Illinois route at roughly $408, versus $95 for simply forming in Indiana. Speed isn't a basis for choosing between them: neither Indiana nor Illinois publishes a standard processing time, so any figure comparing the two is guesswork.
Taxes: Indiana vs Illinois
Both Indiana and Illinois levy a personal income tax on pass-through business income, and your LLC's profits will be taxed where you live and operate. Forming in Illinois doesn't change what an Indiana-based owner pays. Indiana levies a flat 3.0% personal income tax. Illinois levies a flat 4.95% personal income tax. Neither state imposes a separate franchise or privilege tax on LLCs beyond standard filing fees.
Privacy & Asset Protection
Indiana, your home state, actually offers more formation privacy than Illinois: Indiana allows anonymous LLC formation, while Illinois requires owner or manager information on public filings. Illinois doesn't permit anonymous LLC formation; management is disclosed on public filings. Both states provide charging-order protection for LLC members, and for most small businesses the practical difference in asset protection between the two is minimal. From a privacy standpoint there's no reason for an Indiana-based business to form in Illinois.
Annual Maintenance Costs
Indiana LLCs file a biennial report ($32, due in the anniversary month, every two years), and Illinois LLCs file an annual report ($75, due in the anniversary month). If you form in Illinois while operating in Indiana, you maintain filings in both states, Illinois's report plus Indiana's equivalent for your foreign registration, and pay an Illinois registered agent roughly $150 per year. That brings ongoing costs of the Illinois route to roughly $257 per year, versus about $32 to keep a domestic Indiana LLC in good standing.
When Illinois Actually Makes Sense
Forming in Illinois makes sense in a few specific situations: your business genuinely operates in Illinois, with a real office, employees, or property there, or you're relocating to Illinois in the near future. For a typical small business based in Indiana, none of these usually apply. Registering an Illinois LLC to do business back home means $108 in Indiana foreign-registration fees, on top of Illinois's $150 formation fee, while Indiana's own biennial report runs $31 and is due in the anniversary month, every two years. When in doubt, form where you actually do business.
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