Missouri Just Put Wall Street on Notice: Crypto Tax Breaks Go Live

Move over, New York—Missouri’s slicing capital gains taxes on crypto sales to zero. A middle finger to the SEC? Maybe. A smart play for blockchain business? Absolutely.

How it works: Show Me State lawmakers fast-tracked a bill exempting digital asset sales from state capital gains tax. Goes live July 2025. No caps. No means testing. Just keep your transactions on-chain.

The kicker? This isn’t some niche loophole. We’re talking full exemption for everything from Bitcoin buys to NFT flips—as long as it’s reported properly. Take that, 1040.

Of course, the usual suspects are whining about ’lost revenue.’ Funny how they never complain when banks get trillion-dollar bailouts.

A Game Changer For Missouri’s Crypto Market?

Capital gains tax applies to profits made from the sale of assets, including crypto assets. The federal government taxes long-term capital gains—profits from assets held for more than a year—at a lower rate than ordinary income. 

Currently, Missouri taxes capital gains at the same rate as other income, a practice shared by 32 states and the District of Columbia. This exemption could make Missouri a more appealing environment for crypto investors, who often engage in frequent buying and selling of digital assets.

Proponents of the repeal argue that removing the capital gains tax will encourage investment and stimulate economic activity, particularly in the burgeoning cryptocurrency market. 

Jonathan Williams, president and chief economist at the American Legislative Exchange Council, asserts that taxing investments discourages individuals from selling assets and reinvesting their profits. By eliminating this tax, Missouri could attract more crypto investors looking for a favorable regulatory environment.

House Speaker Pro Tem Chad Perkins highlighted that the repeal could benefit not only traditional investors but also those engaged in crypto trading and blockchain technology. 

Senator Curtis Trent, who sponsored the bill, emphasized that the capital gains tax hampers economic growth and makes Missouri less competitive in attracting tech-savvy investors.

Economists Raise Concerns Over Long-Term Impact 

Despite the potential benefits, critics argue that the capital gains tax repeal could exacerbate economic inequalities, particularly in the context of cryptocurrency ownership. 

A report from the US Treasury Department found that wealthier families are more likely to report capital gains, suggesting that the tax cut may primarily benefit high-income earners involved in crypto trading.

The Missouri Budget Project estimates that around 542,000 individual income taxpayers reported capital gains in 2022, with 80% of the tax relief expected to go to the wealthiest 5%. 

The financial implications of repealing the capital gains tax are significant for Missouri’s burgeoning crypto sector. Legislative researchers estimate that the repeal could cost the state about $262 million annually once fully implemented, although some estimates suggest the figure could be nearly $600 million. 

Critics, including economists, worry that while the repeal may initially attract more investors and stimulate the market, the long-term revenue loss could hinder public services and infrastructure.

Featured image from DALL-E, chart from TradingView.com