Forming your business entity in Delaware—specifically, a corporation—gives you a lot of flexibility, but you may still need to follow local laws depending on what state you operate in.
Specifically, if you do business in Indiana, you need to register with the state. We’ll walk through the process and simplify it. But first, how can you tell whether you’re legally doing business in Indiana?
When to register as doing business in Indiana
Delaware C corps—and all other corporations formed outside of Indiana—are referred to as “foreign” corporations by the State.
Indiana statutes do not specifically define what is considered doing business in the state. However, Indiana statutes provide that the following activities would not require you to register with the State:
Defending or settling a lawsuit
Having a bank account in the state
Selling through independent contractors
When to register to collect sales tax in Indiana
Every state has rules about when a company is required to pay sales tax. These are called sales tax nexus rules.
You can think of the nexus as a special version of that state’s border; if you perform certain business activities within that border, you fall into the state’s sales tax nexus, and you’re required to register for and collect state sales tax.
Typically, these actions take the form of buying and selling goods and services
In Indiana, the sales tax nexus rules only apply to sellers who sell physical goods or services to Indiana residents.
Until 2018, selling or buying non-physical goods—like subscriptions to streaming services, SaaS memberships, etc.—did not, generally speaking, qualify you for sales tax nexus. After an important court ruling in 2018, that changed. Now, if you buy or sell non-physical goods or services in a state, you may fall within its sales tax nexus.
Indiana sales tax nexus (physical goods and property)
If you have physical presence in Indiana, then you will likely need to collect and remit sales tax. The Indiana Department of Revenue is not particularly clear on what physical presence in the state. Traditionally, you would be physically present in a state if you have warehouses, retail spaces, or employees and/or representatives of the business in the state.
You will need to pay sales tax as long as you have physical presence regardless of any minimum thresholds. You can learn more about physical presence for sales tax purposes through the State’s website.
Indiana sales tax nexus (non-physical good and property)
The new state sales tax laws applying to non-physical (ie. internet) sales allow you to qualify for sales tax nexus even without physical presence or goods. In Indiana, you need to cross a certain threshold to qualify.
You will need to collect and remit sales tax if you do the following in the current or previous year:
- Collect $100,000 or more in gross revenue from Indiana; or
- Have 200 or more separate transactions into Indiana
If you would like to take a deep dive, you can check out the State’s website.
As usual, this isn’t legal advice—just a guide. If you’re not 100% clear on whether you fall within Indiana’s sales tax nexus, it’s best to confer with your legal counsel and/or an accountant that has expertise in Indiana’s legal code and tax regulations.
How to register to do business in Indiana
Select a name under which to do business. This doesn’t have to be the name you registered when incorporating in Delaware, but it can be.
- Fill out an application. You’ll need to file a Foreign Registration Statement to the Indiana Secretary of State along with a Delaware Certificate of Good Standing.
- Pay the fee. Now you pay the Indiana Secretary of State a $105 filing fee if you file your Foreign Registration Statement online.
- Submit your Foreign Registration Statement.
- Wait. Processing typically takes two to four weeks.
Once you’re approved to operate as a qualified foreign business in Connecticut, you’ll need to comply with certain requirements.
Registered agent in Indiana
Your registered agent in Indiana is your point of contact with local authorities. If you don’t have a physical address for your company in Indiana, it may be advantageous to find a registered agent to receive state notices on your behalf.
Foreign corporations are required to have a registered office in Indiana. The office cannot be a P.O. box, rather it must be a physical address of your registered agent or a licensed registered agent service.
Your registered agent will forward any important information, such as business mail, to you. There are a number of firms that contract out registered agents. They typically cost $50 – $100 per year.
Biennial reporting in Indiana
Every 2 years, you must file a statement with the State, updating any changes to the company address or the composition of the Board and officers. You’ll include info like:
- The legal name of your business
- The name and address of your registered agent
- The names and addresses of board members, managers, and officers
The filing fee for the annual report is $50.
Paying your corporate income tax
Indiana has a corporate income tax. A corporate income tax is a tax imposed directly on the income of your corporation. For more information on filing and paying your corporate income taxes, please see the following guidance from Indiana Department of Revenue.
Registering for sales tax in Indiana
If you meet the requirements to collect and remit sales tax in Indiana, you will need to register with the Indiana Department of Revenue. The state provides two ways for you to register to collect sales tax:
- Indiana Department of Revenue provides InBiz which allows you to register to collect sales tax in Indiana only.
- Streamlined Sales Tax Registration System lets you register for sales tax for multiple states. Indiana is part of this system so you can register to collect Indiana sales and use tax through the Streamlined Sales Tax Registration System.
Hiring and paying employees in Indiana
When you hire a new employee in Indiana, federal and state laws require that you report new hires within 20 days of their hire date. You can report your new hires online.
Your payroll provider should be able to take care of paycheck withholdings, but it’s up to you to register as an employer with the State and set up an online employer account.
For a comprehensive guide of your responsibilities, Indiana provides the following information.
The easiest way to register your business in Indiana
To register your business in Indiana, you’ve got to keep track of a lot of moving parts. Failing to file the right forms, provide the right information, or stay on top of compliance laws can lead to serious headaches.
Capbase makes it easy. When you incorporate your Delaware corporation on Capbase, we will generate the required information needed to register to do business in Indiana and keep you up to date on any required filings.
The compliance calendar inside your Capbase account will notify you of upcoming fees, reporting, or other requirements, so you can keep your startup in good standing with Indiana state officials. Try Capbase now.
Written by Capbase Staff
Capbase is a team of designers, engineers, and business professionals spread across 6 time zones on 3 continents united by our passion for dogs, coffee, and great software.
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