(AP) – The Arkansas House has approved a tax break for
military veterans after the measure drew objections from conservatives over a plan to raise taxes on soda, digital downloads and unemployment benefits to pay for the exemption.
House Bill 1162 was approved Monday on a 75-14 vote would exempt military veterans’ retirement benefits from the state income tax. The measure now heads to the Senate, where a panel endorsed an identical measure.
All local State Representatives voted for the measure, with the exception of District 64 Representative John Payton whose district includes the towns of Norfork, Big Flat and Mountain View.
Supporters say the $13 million exemption would help draw more veterans to the state, but opponents criticize the plan to offset the exemption with increases elsewhere. The offsets include levying state sales taxes on e-books, digital music and ringtones.
It also calls for levying the full 6.5 percent sales tax-rather than the lowered 1.5 percent rate for groceries-on soda and candy and making unemployment benefits subject to income taxes.
The proposal also calls for reducing the tax that restaurants and retailers pay on syrup and soft drinks.
The bill advanced hours after lawmakers gave final approval for Governor Asa Hutchinson’s $50 million income tax cut proposal.
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