Article
Missouri’s landmark legislation introduces significant tax changes
June 5, 2025 · Authored by Bob Johnson
In a sweeping move that significantly reshapes Missouri’s tax landscape, the state legislature has passed a landmark bill that not only eliminates capital gains taxes on individual income but also introduces targeted tax relief measures for seniors, disabled residents, and families.
These provisions were critical in obtaining bipartisan support for the broader tax package, which has been met with both enthusiasm and concern due to its projected impact on state revenue and social equity.
Discover why Missouri’s new legislation is noteworthy and how it can impact individual taxpayers with the following insights.
Key provisions of the new law
At the core of the new legislation is the complete exemption of capital gains from individual income taxes beginning Jan. 1, 2025, including profits from the sale of:
- Stocks
- Real estate
- Businesses
- Bonds
- Digital assets such as cryptocurrency
Supporters of the policy, including Governor Mike Kehoe and the Republican-majority Legislature, argue that removing the tax on investment gains will encourage entrepreneurship, increase business investment activity in the state, and make Missouri a more attractive destination for both individuals and businesses. Supporters of the exemption point to states like Florida and Texas, which have already attracted significant investment due to these states not imposing an income tax.
The legislation also includes a provision for corporations: if Missouri’s top corporate income tax rate drops to 4.5% or lower in the future, corporations could also deduct 100% of their capital gains income.
Targeted relief for older adults and disabled Missourians
The landmark legislation also includes additional tax deductions and credits for older adults and residents with disabilities. Specifically, the bill expands the Missouri Property Tax Credit — commonly referred to as the circuit breaker credit.
This credit provides financial relief to low-income seniors and disabled individuals who own their homes and pay property taxes or pay rent. Under the new law, income thresholds and maximum credit amounts are adjusted to account for inflation and rising housing costs, broadening eligibility and increasing the benefit for more Missouri households.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.