can this be right

i am about to form a LLC in indiana. it is a mobile dj company. as i spoke to someone about setting the whole thing up she said that as long as the company provides the primary service and doesn't sell anything then the only tax she thinks i might have to pay would be an inventory tax on equipment. (this is what the company would pay in taxes, not the members in personal income from profit made) is this way off base?

you have many tax considerations, including whether these other people will be independent contractors/employees; whether you have an s corporation or not and other tax questions. Inventory tax?


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what i forgot to say is that the llc has five members and that is it. no employees no sub contracters etc. what are some of the general taxes i would be looking at?(not ones that the members personally would be looking at but the company entity would have to look at?)

Assuming the LLC elects to be taxed as a partnership, it must file both federal and state income tax returns, but as you apparently know, the LLC does not pay the income tax—the individual members do.

I assume the “inventory tax on equipment” you were told you have to pay is the property tax. Property taxes in Indiana are imposed at the local level on real property (land and buildings) and certain types of personal property. Business personal property consists of inventories, machinery and equipment, special tooling, and construction in progress.

To sum it up, I agree with the woman who advised you. I can think of no other taxes the company would be subject to.

I suggest you look at the Indiana Business Owner’s Guide at the State Information Center at: [url]http://www.ai.org/sic/owners/ib.html.[/url] You will find a lot of good info on starting a business in Indiana at that cite.