Missouri has eliminated its state income tax on individual capital gains, becoming the first state in the nation to do so under a law signed by Governor Mike Kehoe. Taxpayers, however, must still pay federal capital gains taxes to the IRS.
Capital Gains are the profit from the sale of real estate, investments, and personal items.
Senator Rusty Black of Chillicothe explains he was cautious as the bill moved through the legislature.
Slowed it down to make sure it affected everyone with capital gains.
Under the law signed July 10, individuals can now deduct all capital gains reported on their federal tax returns from their Missouri taxable income.
Senator Black acknowledges there will be a negative impact on the budget, but taxpayers will have more money to spend elsewhere in the economy.
For now, this only applies to individual tax returns. Corporate taxpayers are not currently affected.