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May 9, 2025 |  By: Associated Press

Missouri is poised to become the first U.S. state to exempt capital gains from its income tax

Investors who profit from selling stocks, real estate and other assets soon could reap an even larger benefit in Missouri, which is poised to become the first U.S. state to exempt capital gains from its income tax.

Legislation that won final approval Wednesday would halt the capital gains tax this year for individuals and could eventually eliminate it for corporations, if state revenues keep growing. The tax repeal now heads to Republican Governor. Mike Kehoe, who has said he’s “very supportive” of it.

Though proponents hope it can spur the economy, detractors assert that the capital gains tax repeal will primarily benefit the rich and result in less tax revenue for public schools and services. The Republican-led Legislature overcame objections by Democrats only after expanding the bill with greater tax breaks for seniors and disabled residents and new sales tax exemptions for diapers and feminine hygiene products.