SAN DIEGO -- San Diego Thursday will stop charging a processing fee meant to cover the costs of collecting business taxes from landlords following an unfavorable ruling from a state appeals court.

The 4th District Court of Appeal ruled in San Diego Tuesday that the city has illegally taken in millions of dollars in business tax collection fees that should have been approved by voters because they are part of a taxation program.

On Wednesday, City Attorney Jan Goldsmith told The San Diego Union- Tribune that the ruling applies only to fees charged to landlords and not other businesses.

However, attorney Edward Teyssier, who represented two landlords who sued the city over the fees, told the Union-Tribune he will probably have to file a second lawsuit because he does not agree with Goldsmith's interpretation. He said the city should halt charging fees to all businesses, not just landlords.

"He's giving me more work," Teyssier said. "The basic concept that the city is charging a fee to collect a tax is the same in both cases."

San Diego enacted fees to cover the costs of collecting business taxes in 2004. The fees have applied 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 have been paying 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.