Prompt Tax Services

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In July 2025, Missouri signed a new law eliminating the state's capital gains tax for individuals, effective for all tax years beginning on or after January 1, 2025. This means that individuals in Missouri do not pay state tax on any profits from the sale of assets, though federal capital gains taxes still apply.

How the new Missouri law works

100% deduction: Under House Bill 594, individuals can deduct 100% of the capital gains reported on their federal income tax return from their Missouri adjusted gross income.

Applies to all gains: The exemption covers both short-term gains (from assets held for one year or less) and long-term gains (from assets held for more than a year).

No asset limits: This applies to gains from the sale of various capital assets, including stocks, bonds, cryptocurrency, real estate, and business interests.