Policy updates for Missouri farmers & ranchers (July 2025)

The Missouri legislature recently passed two bills that impact local farmers and ranchers: HB594 eliminates the Missouri capital gains tax and SB79 allows the Missouri Farm Bureau to offer health plans to its members. Here’s what you need to know:

Changes to the Missouri capital gains tax

Starting January 1, 2025, Missouri individual taxpayers may be able to deduct 100% of all income reported as capital gain for federal income tax purposes on their Missouri state tax return. Corporations may also benefit from the deduction in the future if Missouri’s corporate tax rate drops to 4.5% or lower. This bill was signed into law by Governor Mike Kehoe in July 2025.

What does this mean for you?

Capital gains tax is tax on the profit you make when you sell an asset for more than what you paid for it. This means that, if this bill is signed into law, and you sell stock, bonds, real estate (other than your primary residence), land, etc - you will not have to pay tax on the profit you made from the sale at the state level. This comes out to tax savings of up to 4.8%.

Federal capital gains tax is still likely to apply. Long-term capital gains (assets held over a year) are taxed federally at 0%, 15%, or 20%, depending on your income. Short-term capital gains (assets held less than a year) are taxed as ordinary income at your federal income tax rate.

Health insurance for Missouri farmers & ranchers

With the passing of SB79, the Missouri Farm Bureau will now be able to provide affordable health care coverage for farmers, small business owners and individuals. The Missouri Farm Bureau is expected to launch the program within the next year. This bill was signed into law by the Governor in July 2025.