Missouri Bill Aims to Eliminate Capital Gains Tax: What It Means for You
Key Points – Missouri Bill Aims to Eliminate Capital Gains Tax: What It Means for You
- Missouri Senate Bill 46 (SB 46) Seeks Capital Gains Tax Elimination
- First State to Take this Step
- Implications for Investors and Tax Plans
- 4 Minute Read
Missouri Bill Aims to Eliminate Capital Gains Tax: What It Means for You
Missouri is on the brink of a historic tax reform that could significantly benefit investors, property owners, and entrepreneurs across the state. Senate Bill 46 (SB 46), recently passed by the Missouri Senate and awaiting the governor’s signature, proposes a groundbreaking change: to completely eliminate capital gains income from Missouri state income tax starting in tax year 2025.
What Is Capital Gains Income?
Capital gains income is the profit earned from the sale of assets such as:
- Stocks and bonds
- Real estate
- Business interests
- Cryptocurrencies
These gains are typically realized when an asset is sold for more than its purchase price. On the federal level, long-term capital gains are taxed at preferential rates—ranging from 0% to 20% depending on your income bracket. Until now, Missouri has taxed capital gains at the same rate as ordinary income.
What Does SB 46 Change?
SB 46 introduces a major shift in Missouri’s tax policy by excluding all capital gains income from state taxation. This means:
- No Missouri state tax on profits from selling stocks, real estate, or crypto
- Potential tax savings for investors and business owners
- Increased attractiveness of Missouri as a tax-friendly state
This change is set to take effect for the 2025 tax year, pending the governor’s approval .
Why This Matters
Missouri is poised to become the first state in the U.S. to fully eliminate capital gains tax at the state level. This could:
- Encourage more investment within the state
- Attract high-net-worth individuals and businesses
- Set a precedent for other states to follow
According to the Tax Foundation, Missouri’s move is part of broader efforts to create a more competitive and pro-growth tax environment.
What Should Missouri Residents Do?
If you’re a Missouri resident with investments or plans to sell property or a business, this change could have a significant impact on your tax planning strategy.
Now is the time to:
- Review your investment portfolio
- Consult with a tax advisor
- Plan future asset sales with the 2025 tax year in mind
Stay Informed
As we await the governor’s signature on SB 46, it’s important to stay updated on the bill’s progress and understand how it may affect your financial future.
For personalized advice on how this legislation could impact your tax situation, feel free to contact Modern Wealth Management. You can schedule time with us here, or by clicking the button below.
Sources:
- https://news.stlpublicradio.org/government-politics-issues/2023-05-12/missouri-lawmakers-pass-tax-bill-that-includes-capital-gains-tax-cut
- https://house.mo.gov/Bill.aspx?bill=HB986&year=2023&code=R
- https://taxfoundation.org/state/missouri/
Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.
The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.
Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.