BLGF Opinion February 2, 2009

FACTS: Radyo Baha'i owned by The Dawnbreakers, Inc. (DBFI is requesting exemption from
payment of real property tax on the radio equipment and other donated units.

Basis for requesting exemption from payment of real property tax: machinery which are actually,
directly, and exclusively used for Religious, Charitable and Educational purposes are not
among those real properties exempted from payment of real property tax as provided for under
Section 234(b) of the Local Government Code of 1991quoted hereunder:

"SEC. 234. Exemptions from Real Property Tax. - The following

are exempted from payment of the real property tax:

"(b) All charitable institutions, churches, parsonages or convents

appurtenant thereto including mosques, nonprofit or religious
cemeteries and all lands, buildings, and improvements which are
actually, directly and exclusively used for religious, charitable or
educational purposes;

ISSUE: Whether or not radio equipment and other donated units that are actually, directly, and
exclusively used for Religious, Charitable and Educational purposes exempted from payment of
real property

HELD: No. They are not exempted from real property taxation.

RATIO:
Local Finance Circular No. 1-2000, amending Joint Local Treasury/Assessment Regulations No.
1-88, providing the proper appraisal and assessment of real properties, the pertinent portion of
which reads as follows:

1. Machinery that is permanentlv attached to land and buildings is subject to real property tax,
even though this is actually, directly and exclusively used for religious, charitable or educational
purposes.

2. Machinery that is not permanently attached to real estate is:

a. Subject to the real property tax if it is an essential and principal element of an industry, work
or activity without which such industry, work or activity, cannot function; and
b. Not subject to the real property if it is not an essential and principal element of an industry,
work or activity.