Philadelphia and the school district may owe more than $48 million after losing a commercial property tax case.

The city and school district of Philadelphia may have to repay $ 48 million in taxes plus interest after Mayor Jim Kenney’s administration lost their appeal this week on a 2019 case found the city illegal Assessment targeted for commercial property owners on their property in 2018.

A panel of judges at the Pennsylvania Commonwealth Court on Thursday upheld a lower court ruling that the city violated the state’s unity clause that requires all commercial and residential real estate to be valued using the same method by referring to commercial real estate in its 2018 valuation aims.

The city has not yet announced whether it will challenge the case in the Pennsylvania Supreme Court.

“Although we are disappointed with the verdict, we are reviewing and evaluating the next steps,” said Kenney spokesman Kevin Lessard in a statement.

The case, which affects around 700 properties from neighborhood stores to 1 Liberty Place, was remarkable because of its size and because plaintiffs did not dispute the appraisals themselves, but rather the manner in which the appraisals were conducted.

“This one is pretty unique and I’ve been doing it for a long time,” said Peter Kelsen, a Blank Rome attorney who has represented the owners of more than 250 of the properties involved. “I haven’t seen a constitutional challenge of this magnitude against the city for decades.”

If the city does not appeal, the ruling could put a significant financial strain on the ailing school district as well as the city, which is struggling to recover from the economic downturn caused by the coronavirus pandemic. The $ 48 million disputed tax payments include $ 14 million in community real estate tax revenue and $ 34 million in real estate and business use and occupancy taxes for the school district. In addition, the city would have to pay interest that runs into the millions.

The ruling has no impact on the city’s ratings of the affected properties in the years since 2018, although some property owners are challenging these ratings separately.