First state to potentially remove capital gains tax on Bitcoin, XRP, stocks

Missouri could soon become the first U.S. state to eliminate capital gains tax entirely — a move that would have profound implications for crypto holders, stock investors, and real estate stakeholders alike.Missouri House Bill 594, which passed a final vote in the state legislature, now awaits Governor Mike Kehoe’s signature. If signed, it would enact a 100% income tax deduction on all capital gains, including profits from digital assets like Bitcoin and XRP.At the time of writing, Bitcoin is trading above $104,000 and XRP holds at $2.38 — both up in the last 24 hours as investors digest the news.The proposal arrives just weeks after President Trump floated a sweeping federal tax reform plan that would scrap income tax and replace it with revenue from import tariffs. “When tariffs cut in, many people’s income taxes will be substantially reduced, maybe even completely eliminated,” Trump said in an April 27 Truth Social post.For now, all eyes are on Governor Kehoe, who has not publicly committed to signing the bill. But if he does, Missouri could become the most tax-advantaged state in America for crypto and stock investors alike.Prior to the proposed changes in House Bill 594, Missouri taxed capital gains as ordinary income. This meant that profits from the sale of assets like stocks, real estate, or cryptocurrencies were subject to the state's progressive income tax rates, which ranged from 0% to 4.7% based on income brackets.For instance, an individual with $350,000 in capital gains would fall into the highest tax bracket, resulting in a state tax liability of approximately $16,273.55 on those gains.