SAN DIEGO -- A state appeals court said San Diego has charged businesses millions of dollars in fees that should have been approved by voters.

In a ruling handed down in San Diego Tuesday, the 4th District Court of Appeal said the city's actions violated voter-approved tax-limiting measures, such as Proposition 218 passed in 1996, The San Diego Union-Tribune reported.

Two landlords sued the city over the fees, which were enacted in 2004 to cover the costs of collecting business taxes. The fees apply to all business owners within the city of San Diego, including people who rent out a single home and hobby artists who sell a few paintings on the side.

According to the City Treasurer's Office, 95,000 businesses in San Diego pay the fee, along with owners of 67,000 rental units. The city collected more than $13.5 million in taxes from them last fiscal year and charged $2.7 million in processing fees.

Edward Teyssier, the attorney who represented the plaintiffs, told the Union-Tribune that the goal of his client's lawsuit is to get all the fee money reimbursed to the business owners.

Andrew Jones, assistant city attorney for civil litigation, said he could not comment on the ruling because he has not had the chance to review it, the Union-Tribune reported.

The City Council could decide to appeal to the state Supreme Court.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, told the Union-Tribune that Tuesday's ruling could lead cities throughout California to re-examine their fees.

"Any court of appeals decision, which is certified for publication, is binding on all trial courts all throughout California, not just San Diego," he said. "Published decisions can have a significant broad-based impact."