1. (a) Exemption amount — Arkansas Code § 26-51-306.

   1. (1) The first six thousand dollars ($6,000) of service pay or service allowances received by any active duty member of the United States Armed Forces shall be exempt from Arkansas income tax.
   2. (2) All such service pay or allowances received above and beyond six thousand dollars ($6,000) for any given tax year shall be subject to Arkansas income tax.

2. (b) Combat pay — Arkansas Code § 26-51-306(a)(4).

   1. (1)

      1. (A) For enlisted personnel, gross income shall not include compensation received while on active service in a combat zone or while hospitalized as a result of serving in a combat zone.
      2. (B) I.R.C. § 112(a).

   2. (2)

      1. (A) With respect to commissioned officers, gross income shall not include compensation received while:

3. (i) On active service in a combat zone; or

   1. (ii) Hospitalized as a result of serving in a combat zone.

      1. (B) I.R.C. § 112(b).

      2. (C)

         1. (i) The amount of compensation for a commissioned officer that is excludable from gross income is limited to the "maximum enlisted amount".
         2. (ii) The term "maximum enlisted amount" is defined as the highest rate of basic pay payable during the period of combat zone service to any enlisted member of the United States Armed Forces at the highest pay grade applicable to enlisted members.
         3. (c) Service allowances — Arkansas Code § 26-51-306. Service allowances shall include, but not be limited to, the following:
   2. (1) Veteran’s benefits;
   3. (2) Medical benefits;
   4. (3) Disability benefits;
   5. (4) Professional education;
   6. (5) Moving and storage;
   7. (6) Group term life insurance;
   8. (7) Survivor and retirement protection plan premiums;
   9. (8) Subsistence;
   10. (9) Uniform;
   11. (10) Housing;
   12. (11) Overseas cost of living;
   13. (12) Evacuation;
   14. (13) Family separation allowances;
   15. (14) Death gratuities;
   16. (15) Interment (burial) allowance;
   17. (16) Various travel allowances;
   18. (17) Dependent benefits; and

   19. (18) When provided in connection with a permanent change of station, allowances for:

       1. (A) Dislocation;
       2. (B) Temporary lodging; and

       3. (C) Move-in housing.

          1. (d) United States armed services defined — Arkansas Code § 26-51-306. United States armed services shall include the following:
   20. (1) United States Army;
   21. (2) United States Navy;
   22. (3) United States Air Force;
   23. (4) United States Marine Corps;
   24. (5) United States Coast Guard;
   25. (6) National Guard;
   26. (7) Reserve units; and
   27. (8) United States Public Health Service.

Codification Notes: I.R.C. § 112(a) and (b) are codified at 26 U.S.C. § 112(a) and (b).