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Kentucky sinks Ark Park’s millions in tax breaks

July 22, 2017
Sun sets on ark at Ark Encounter park in Kentucky_Ark Encounter image

Ark Encounter's replica of the vessel used in the Biblical tale of Noah and the flood is the largest timber frame structure in the world, according to the Kentucky theme park's website. It is 510 feet long, 85 feet wide and 51 feet high.

Ark Encounter, the evangelical/fundamentalist Christian theme park in Grant County, Kentucky, will have to stay afloat without the aid of $18 million in state tax breaks.

The Kentucky Tourism, Arts, and Heritage Cabinet sent the operators of the park, which features a massive replica of Noah's Ark, a letter last week notifying them that the park would no longer get the government subsidies. The incentive program lets developers of qualified tourism projects recover up to 25 percent of a project's cost through a return of sales tax paid by visitors on admission tickets, food, souvenirs and other expenses.

State officials revoked the tax relief that Ark Encounter receives effective June 28 because, according to the letter, that day the park breached the tax agreement by transferring the property from a for-profit company to a nonprofit enterprise.

Years-long tax relief effort: This is the latest fight in the battle for tax subsidies for the Northern Kentucky theme park, dubbed the Ark Park because it features a 510-foot-long model of the Biblical flood ship.

In 2014, Kentucky officials refused to provide the tax breaks because of concerns about public money for religious activities.

Two years later, after a federal lawsuit, a change in the Kentucky governor's office and new appointees to the state's Tourism Development Finance Authority board, the millions in tax breaks were granted to Ark Encounter.

Now, however, the tourism cabinet says the tax rebates cannot continue.

Transfer transgression: The official letter says state officials learned July 10 that owners had transferred the park from Ark Encounter LLC, a for-profit company, to Crosswater Canyon, a nonprofit subsidiary of Answers in Genesis. The transfer price was $10.

Yep, 5 + 5 = 10 dollars. No other zeros. But the low cost is not an issue. Rather, it's the operating structure of the new management group.

By selling the land to its nonprofit counterpart, the park would be exempt from property taxes. It also, could mean it would not be subject to the safety tax that Williamstown, Kentucky, enacted in April.

This 50-cents-per-ticket levy applies to tickets sold at Ark Encounter and the Williamstown Family Fun Park. The new tax revenue will be used for the city to upgrade its emergency equipment, which would be needed if it has to respond to an emergency at either attraction.

But by avoiding those taxes, the Ark Park now faces loss of the other tax savings.

If the property is deeded back to the for-profit entity within 30 days, Kentucky tourism officials say the original tax incentives will be restored.

The tourism cabinet also noted that a nonprofit may qualify for a Tourism Development tax incentive. But, notes the letter to Ark Park officials, such groups must go through the tax relief process like every other entity.

Park says it's innocent: Ark Encounter management contends it has done nothing wrong.

"We don't believe that the transfer of the property created a default, but we will comply with the concerns that the tourism department may have related to the transfer," theme park spokesman Mark Looy told the Courier-Journal.

Looy added that Ark Park officials "look forward to maintaining a positive relationship with the state long into the future."

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It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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