LOUISVILLE, Ky. (WDRB) -- The Ark Encounter is losing a major tax break of $18 million for breach of contract.

Weeks after the Ark Encounter celebrated its one year anniversary, the state's tourism agency pulled the plug on millions in tax breaks.

The Tourism Art and Heritage Cabinet claims Answers in Genesis, the group that built the Ark, broke an incentives agreement by transferring the property to a nonprofit affiliate.

That incentive agreement refunded a portion of sales tax collected at the site worth up to $18 million dollars. 

Ark Encounter reportedly transferred ownership to Crosswater Canyon back in June, but never notified the state or got written consent. 

This week, officials sent a certified letter to the Ark's law firm saying in part: 

"The owner of the Ark Project, upon which the tax incentives is based, is an "eligible company" ...  If Crosswater Canyon, LLC, a non-profit legal entity is now the owner of the Ark Project, then the owner of the project has not been established as an "eligible company."

Mark Looy, Co-founder and Chief Communications Officer at Answers in Genesis responded, saying they don't believe the transfer of the property created a default. 

"We don't believe the transfer of the property created a default, but we will comply with concerns that the Tourism Department may have related to the transfer," Looy said.

Tax rebates stopped accruing June 28. Answers in Genesis says it plans to maintain a positive relationship with the state.

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Friday marks one year since opening of Ark Encounter

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