Governor Signs Arkansas Tax Cut On Military Retirement Pay

Feb 7, 2017

Gov. Asa Hutchinson signing into law Tuesday legislation that would give a state tax break to military retirees.
Credit Michael Hibblen / KUAR News

Arkansas Gov. Asa Hutchinson has signed a bill giving a tax break to retired military veterans and imposing additional taxes on digital downloads, treats and unemployment benefits.

The $13 million exemption is intended to boost economic development. Its supporters hope veterans retire in Arkansas to begin second careers and say shifting the tax burden to others was necessary to make it happen.

Detractors opposed adding sales taxes on e-books, digital music and ringtones and making unemployment benefits subject to income taxes. Also under the bill, soft drinks and candy will now be taxed at the state's full 6.5 percent rate, rather than a reduced rate imposed on other groceries.

Hutchinson signed the bill Tuesday. He previously approved a $50 million tax cut benefiting those making less than $21,000 a year.