Missouri to End Taxes on Stock Profits: What It Means
Missouri is doing something big. The state may soon become the first in the United States to let people keep all their profit from selling stocks—without paying any state income tax on it.
This change could bring more money to investors. It may also bring more people and businesses to Missouri. Let’s break down what this means, how it works, and why it matters to you—even if you don’t live in Missouri.
What Is a Stock Sale Profit?
Let’s say you buy a stock for $50. A few years later, you sell it for $100. The extra $50 you made is called profit, or capital gain. Right now, most states make you pay income tax on that profit.
But Missouri wants to change that.
What Is Missouri Doing?
In early May 2025, Missouri lawmakers announced a plan to stop taxing profits from stock sales. That means if you sell stocks and make money, you won’t owe any state income tax on it in Missouri.
This rule could start as early as next year. If passed, Missouri would be the only state in the U.S. to do this.
Why Is Missouri Making This Change?
Missouri leaders want to bring more investors and grow the economy. Here’s why they think it’s a good idea:
- More people might move to Missouri. If people know they can keep more of their money, they may want to live or work there.
- More businesses may come too. Big companies and banks that invest in the stock market may open offices in Missouri to save on taxes.
- People might invest more. If taxes go down, people may buy more stocks, helping the market grow.
In short, Missouri hopes this tax break will make the state richer and busier.
Who Benefits from This?
This change mostly helps people who:
- Own stocks or mutual funds
- Trade investments as part of their job
- Sell shares in their own company
It’s a bigger deal for wealthy people who trade stocks often. But even regular families who save for retirement could benefit.
For example:
- Retired teachers selling shares they bought years ago
- Young investors just starting to grow their savings
- Small business owners selling company shares
Everyone who lives or works in Missouri—and earns money from stocks—could keep more of their profit.
What About Federal Taxes?
Good question! Even if Missouri removes state taxes, the federal government still taxes stock profits. That means you’ll still have to pay IRS capital gains tax.
But skipping state tax can still save people a lot of money—thousands of dollars a year in some cases.
Will Other States Do the Same?
Some experts say yes. If Missouri sees strong growth, other states might copy this plan. It could start a tax reform trend across the U.S.
But not all states will follow. Some may worry about losing tax money that helps pay for schools, roads, and hospitals. They might wait to see if Missouri’s plan works before trying it themselves.
What Do Critics Say?
Not everyone loves this idea. Some people think:
- It helps rich investors more than working families
- Missouri could lose tax money used for public services
- It might not bring as much growth as leaders hope
But Missouri’s government says the long-term benefits—like new jobs and businesses—will make up for it.
Why Should You Care?
Even if you don’t live in Missouri, this change matters. Here’s why:
- You might invest one day. This could affect where you decide to live or open a business.
- Other states may copy this. Your state could lower taxes next.
- The U.S. tax system may shift. Moves like this can lead to bigger national changes over time.
And if you already invest in the stock market, this could help you plan smarter for your future.
Missouri’s Economy: Ready for Growth?
Missouri has a mix of farms, factories, and small towns. By cutting taxes on stock profits, it hopes to:
- Attract more people
- Grow its cities
- Build up savings and wealth for its residents
The state’s leaders believe this could make Missouri one of the top places to live and work in the country.
Final Thoughts: A New Chapter for Missouri
This is a big step for Missouri. If lawmakers pass this rule, the state will change how people think about taxes and investing.
Whether you’re a parent saving for college, a small business owner, or just starting to learn about stocks, it’s exciting to see a state try something bold. Keep your eye on Missouri—it might just be the start of a bigger trend in America.