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HB 3376

Modifies provisions relating to the calculation of income tax, repealing income tax subtractions for certain capital gains

2026 Regular Session Introduced by Kemp Strickler

Missouri HB 3376 eliminates state income tax deductions for certain capital gains, increasing tax liability for investors and asset sellers while generating additional state revenue.

Referred: Emerging Issues(H)
#revenue #departmentof #taxationandrevenue-general #taxationandrevenue-income
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Bill Summary · HB 3376

Legislative bill overview

HB 3376 eliminates Missouri state income tax deductions for certain types of capital gains. The bill modifies how the state calculates taxable income by removing specific subtraction allowances that currently benefit capital gains income. This represents a shift toward taxing investment income at higher effective rates for Missouri residents.

Why is this important

Capital gains taxes directly affect investors, retirees living on investment income, and business owners who sell assets. Removing these deductions would increase state tax liability for affected taxpayers and potentially generate additional revenue for Missouri's state budget. The change could influence investment decisions and residency choices for high-income Missourians.

Potential points of contention

  • Taxpayer burden: Eliminates a tax benefit that primarily affects investors and retirees, potentially increasing their effective tax rates without corresponding rate reductions
  • Economic competitiveness: Neighboring states' capital gains treatment could influence whether wealthy individuals and investment-focused businesses locate in or leave Missouri
  • Revenue allocation uncertainty: The bill doesn't specify how recovered tax revenue would be used (general fund, education, infrastructure, etc.)
  • Scope ambiguity: "Certain capital gains" requires clarification—does this affect all long-term capital gains, short-term gains, or specific asset types?

Compiled from official sources — confirm details with the bill’s official record.

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