Selling Stocks, Property, or Crypto? Missouri’s New Law Could Save You Thousands

Big changes are coming to Missouri taxes, and this time they’re in your favor.

Thanks to House Bill 594 (HB 594), signed by Governor Mike Kehoe on July 10, 2025, Missourians who sell investments, property, or even cryptocurrency in 2025 and beyond won’t pay state tax on their profits.

This law makes Missouri one of the first states in the nation to largely exempt capital gains from state individual income tax.

A Quick Refresher: What Are Capital Gains?

A “capital gain” is the profit when you sell an asset for more than you paid.

Common examples include:

• Selling stock you bought years ago at a much higher price today.
• Selling a house or rental property for more than your purchase price.
• Selling cryptocurrency that has appreciated in value.

The IRS taxes capital gains at either short-term rates (if you held the asset less than a year, taxed like ordinary income) or long-term rates (held over a year, taxed at 0%, 15%, or 20%, depending on your income).

Until now, Missouri taxed those gains the same way it taxed other income, at rates up to 4.7% in 2025.

What HB 594 Does

Individual Capital Gains (effective January 1, 2025)

Missouri taxpayers can subtract 100% of all capital gains reported on their federal return when calculating their Missouri taxable income. Whether short-term or long-term, it’s excluded for state purposes.

Corporate Capital Gains

The exemption isn’t immediate. Corporations will only be able to subtract 100% of capital gains if Missouri’s top individual tax rate falls to 4.5% or lower. Since the rate is 4.7% in 2025, corporations won’t qualify in 2026.

Future rate cuts could trigger this benefit.

Why This Matters for Missourians

• Lower state tax bills. If you sell appreciated assets in 2025 or later, you’ll pay no Missouri tax on the gain. That can save thousands.
• Planning opportunities. Timing of sales such as a home, business, or investment portfolio may look different now that state tax isn’t part of the equation.
• Withholding and estimates. If you expected gains this year, check your withholdings or estimated payments. Otherwise, you may end up overpaying the state.

A Real-World Example

Suppose you bought a home for $200,000 and sold it in 2025 for $350,000. After accounting for the federal home sale exclusion (up to $250,000 of gain for single filers, $500,000 for married couples), let’s say you still have a $50,000 taxable gain at the federal level.

• Before HB 594: Missouri would have taxed that $50,000 gain at your regular income tax rate, up to 4.7%. That’s as much as $2,350 in state tax.
• After HB 594: You’ll subtract the full $50,000 from your Missouri taxable income. Your Missouri tax bill on that gain? $0.

The Bottom Line

HB 594 marks a major change in Missouri’s tax landscape. Individuals can now keep more of the profit when selling investments, property, or other capital assets. Corporations will need to wait for future rate reductions before seeing the same benefit.

If you’re considering selling assets or anticipating a gain, now is the time to revisit your tax planning.

At Smith Patrick CPAs, we help Missourians adjust withholdings, plan sales, and structure transactions so you can make the most of new rules like HB 594. Let us help you turn these changes into opportunities.