Missouri fully conforms to federal §168(k) via rolling IRC conformity — STR investors get 100% of the federal bonus deduction on the Missouri return with no add-back. Federal and state savings stack, delivering extra Year-1 tax relief for property acquired and placed in service after January 19, 2025. Cross-reference our all-50-states conformity guide to see how Missouri lines up against every other US jurisdiction.
Modeled on a $150,000 federal §168(k) deduction. Run your own numbers in the Conformity Tool →
How Missouri adopts §168(k) — the rolling conformity mechanic
Missouri conforms to the Internal Revenue Code on a rolling basis for individual income tax purposes. That means when Congress changes the IRC — as it did when the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) restored 100% bonus depreciation permanently for property acquired and placed in service after January 19, 2025 — Missouri automatically adopts the new federal treatment without needing separate state legislation.
The controlling statutes are Mo. Rev. Stat. §143.011 and §143.121, which set Missouri taxable income by reference to federal AGI. There is one narrow historical exception: assets placed in service between July 1, 2002 and July 1, 2003 have a specific non-conformity carve-out. For everything after that window — which includes all OBBBA-era acquisitions — Missouri follows federal treatment.
Static-conformity states required legislation to adopt OBBBA. Missouri didn't.
Worked example — $150,000 federal deduction plus extra Missouri savings
Consider a Missouri STR investor with a $150,000 Year-1 §168(k) deduction on a short-term rental acquired and placed in service after January 19, 2025. Assume the investor is in the 37% federal bracket and pays Missouri's 4.7% top individual income tax rate.
| Line | Amount | Notes |
|---|---|---|
| Federal §168(k) deduction | $150,000 | OBBBA 100% bonus |
| Federal Y1 tax savings @ 37% | $55,500 | Ordinary bracket |
| Missouri state deduction | $150,000 | Full conformity, no add-back |
| Missouri Y1 state tax savings @ 4.7% | $7,050 | Top rate |
| Total Year-1 combined savings | $62,550 | Federal + Missouri |
Because Missouri piggybacks on federal AGI, there are no basis differences to track and no separate depreciation schedule to maintain across the property's holding period.
The statute explained
The controlling Missouri authorities are Mo. Rev. Stat. §143.011 and §143.121, which define Missouri taxable income by rolling reference to federal AGI. Because no adjustment is specified for §168(k) bonus depreciation (outside the narrow 2002-2003 window), the federal deduction reduces Missouri taxable income dollar-for-dollar.
How Missouri compares to decoupled states
The contrast with decoupled states is stark. In Pennsylvania, an STR investor with the same $150,000 federal deduction adds back the entire amount on the state return — giving up roughly $4,605 in Year-1 state tax savings at Pennsylvania's 3.07% flat rate. California, New York, Georgia, and about two dozen other jurisdictions impose similar 100% add-backs, some at much higher rates.
Missouri investors face none of that. The federal deduction flows through unchanged, and the extra $7,050 in state savings stacks on top of the federal $55,500. To compare Missouri against any decoupled state at any deduction amount, use the state conformity tool.
What this means for your STR purchase decision
Missouri's full conformity is a real underwriting advantage. When you're evaluating a Branson, Lake of the Ozarks, or Kansas City / St. Louis-area STR purchase, you can price in both federal and state Year-1 tax savings at underwriting — not just the federal deduction. On a mid-sized property with $150,000 in bonus-eligible components, that's an extra $7,050 in first-year cash flow.
The qualifier: the property must be acquired and placed in service after January 19, 2025 to qualify for OBBBA's 100% federal bonus. Pre-January 19, 2025 acquisitions fall under the earlier phaseout schedule.
Before you make an offer, run the address on your property to see the calibrated Year-1 bonus-eligible dollar amount — DepreciMax reports classify every finish as 5-year, 15-year, or 39-year and quantify the federal plus Missouri state savings.
Analyze a specific Missouri property
Run any Missouri STR listing through DepreciMax's $99 property report — line-item finish classification with Missouri-specific state impact math.
Frequently asked questions
Do I get bonus depreciation on both my federal and Missouri return?
Yes. Missouri conforms to federal §168(k) via rolling IRC conformity under Mo. Rev. Stat. §143.011 / §143.121. STR investors claim the full federal 100% bonus deduction, and it flows through to the Missouri return with no add-back. For property acquired and placed in service after January 19, 2025, OBBBA's permanent 100% bonus applies at both the federal and Missouri levels. One narrow historical exception exists for assets placed in service between July 1, 2002 and July 1, 2003.
What is Missouri's top individual income tax rate?
Missouri has a top individual income tax rate of 4.7% for 2026, on a flat basis under recent reforms. On a $150,000 federal §168(k) deduction, a Missouri STR investor picks up $7,050 in additional Year-1 state tax savings on top of the federal deduction.
Does Missouri plan to change its §168(k) conformity in 2026?
No public legislation is pending to decouple Missouri from federal §168(k) for 2026. Because Missouri ties to federal AGI on a rolling basis, changes would require a new addition/subtraction modification — which has not been proposed.
What happens on sale — does Missouri recapture bonus depreciation?
Missouri follows federal basis and federal §1245 / §1250 recapture rules because the state allows the full federal §168(k) deduction. There is no separate Missouri recapture calculation for bonus depreciation; recapture flows through federal AGI to Missouri taxable income unchanged.
Does Missouri conformity apply to §179 as well?
Yes. Missouri conforms to federal §179 expensing at the federal cap without a separate state limit. STR investors can layer §179 (for qualifying tangible personal property) on top of §168(k) at both the federal and Missouri levels, subject to federal §179 income limits.
Every state's §168(k) position, in one place
Interactive map, sortable table, and deep-dive guide for each of the 51 jurisdictions — post-OBBBA verified.
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