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MILPITAS — In an effort to offer some relief to local businesses during the ongoing coronavirus pandemic, the Milpitas City Council will extend the deadlines for business related fees by several months, and will waive all late penalties against businesses until that time.

In a unanimous vote Tuesday, the council directed city staff to draft an ordinance and a resolution that would allow businesses in Milpitas to hold off until as late as May 31 on paying their business license fees, fire permit fees, and other charges that come along with an annual business license renewal.

Any late payment penalties for those fees that have been accrued so far will be waived, and city staff won’t issue any further late penalty notices until after May 31, city staff said.

“I think it’s important for us to do whatever we can to help support our small businesses community, and that’s starting in house first,” Councilwoman Karina Dominguez said at the meeting.

“I’m in huge support of this,” Mayor Rich Tran said.

Nearly 3,300 invoices for business license tax and related fees were issued this year, city staff reports said, with an average cost of about $116. About 1,000 businesses also needed to pay fire permit fees, bringing their total average bills to about $753, staff reports said.

While these license and permit fees are typically due at the beginning of the year, Walter Rossmann, the city’s finance director, said in an interview Thursday that as of Jan. 31, about 57 percent of the businesses that owe business license tax and fees had not paid, and about 40 percent of the businesses that also need to pay a fire permit fee were not paid.

City council and staff agreed that allowing businesses to defer costs of up to several hundred dollars could be a boon for local proprietors, and it would be an unfair burden to hit them with late fees.

“I don’t think given where we are in the economy, where we are in the fiscal situation for our businesses, I don’t think it’s right to charge them late fees,” Rossmann said.

“How many businesses did not even apply for a 2021 permit, maybe because they went out of business,” Tran noted at the meeting, underscoring the impact of the coronavirus pandemic.

The council also briefly considered creating a water bill assistance program for businesses, similar to one it already runs for residential customers in lower income households, but ultimately held off, noting there were not many businesses who were delinquent on their water bills, so the impact would be limited.

The council will need to approve the new ordinance and resolution at upcoming council meetings to finalize the fee deferments and penalties waiver, which may not officially go into effect until about April.

Rossmann reiterated, however, that with the direction from council, staff will not issue any late fees to businesses in the meantime.