On Feb. 7, Governor Asa Hutchinson signed a bill titled Act 141 that will give retired military veterans an exemption from state income tax, as reported by Arkansas News. According to Act 141, there will be a tax increase on candy, soft drinks and digital downloads to balance the tax break.

“This initiative will make Arkansas a more military friendly retirement destination and will encourage veterans to start their second careers or open a business right here in the Natural State,” Hutchinson said.

Vice President of the Arkansas Veterans Coalition Will Beams approved of Act 141, saying that it is one step closer toward Arkansas realizing the positive impact veterans can have on the state’s economy.

“Most military leaders nowadays have a two-year degree or higher and years of experience in leading people, so we are going to be attracting people to fill up our leadership positions in companies here in Arkansas, and we are going to bring people to Arkansas, which attract businesses to Arkansas, because there is an employable population here,” Beams said, according to Arkansas Online.

The tax exemption will be levied in a 6.5 percent tax increase on soft drinks and candy. Online downloads such as music, movies and e-books, including online textbooks, will also have a tax increase.

“It’s benefiting a pretty small community, and everyone buys pop, everyone buys candy, everyone gets on iTunes, so people are going to be legitimately upset,” junior and veteran Luke Johnson said. “On our trip to the Capitol, the senators were all saying they didn’t like having to do this because [they] don’t like having to raise taxes on anybody.”

The break is estimated to cost $13.4 million a year, according to Arkansas News. An estimate of $5.9 million a year will be moved from general revenue to Medicaid under the new bill.

“Governor Hutchinson is in support because he’s seeing the long term benefits of bringing as many retirees from the military as possible in the state of Arkansas,” Johnson said.

Other states, including Connecticut, Illinois and Wisconsin also have some sort of tax exemption for veterans, though not all have a complete break from state income tax, according to the official military website.

“We worked hard to make sure that we could pay for [the bill] and it would keep within our budget, and we have done that,” Hutchinson said at a news conference in the Governor’s Conference Room before signing the bill. “I do believe that the legislation will be a significant boost to this state.”

The bill will officially be enforced Jan. 1, 2018.