Starting this year, Missouri residents may no longer owe state income tax on capital gains — a major shift that could reshape how you manage your investments, real estate, and business assets.
The bill has passed both the House and Senate and is awaiting the governor’s signature, which is widely expected. Once signed, Missouri will become the first state with a personal income tax to fully exempt capital gains.
As a financial advisor in Missouri, here’s what this could mean for your money:
1. Selling Assets? This Could Be the Most Tax-Efficient Year Yet
If you’re selling stocks, a rental property, or even a business in 2025, this new law could save you thousands. While you’ll still pay federal capital gains taxes, the state portion typically 4.95% would be gone.
That means more profit stays in your pocket.
2. Rethink Real Estate and Business Exit Plans
This is a big deal for folks selling a second home, investment property, or business they've built over time. Previously, large gains could push you into a higher state tax bracket. Now, those gains may come with zero state income tax.
It could be an ideal time to revisit or accelerate your exit strategy.
3. Portfolio Management Just Got a Little Easier
Capital gains taxes often discourage people from selling appreciated investments. With the state portion gone, there’s less friction in making smart changes to your portfolio whether it’s rebalancing, harvesting losses, or adjusting to new goals.
This change opens up new room for tax-efficient investing.
4. Big Picture: Benefits Come with Tradeoffs
While this is a financial win for many, it’s not without cost. The state expects to lose $260–$600 million per year in revenue and that could affect future budgets, public programs, and infrastructure.
Good financial planning takes both personal and public realities into account.
What Should You Do?
Whether you’re selling a business, reallocating investments, or just want to understand how this affects your tax plan, now’s the time to take a fresh look.
💬 Let’s talk about how this change fits into your long-term strategy.