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Business
Online sales tax rule awaits, but not this shopping season
 Mike Copeland  / 
 11.26.18

Cyber Monday arrived threatening to knock another brick out of brick-and-mortar retailers, as experts predicted more than $7.8 billion in online sales as a sequel to Black Friday’s record-setting $6.2 billion online performance.

Somewhere Karen Patterson was smiling. A day earlier, on Sunday, the Waco native now living in Midland was killing time inside Old Navy at Central Texas Marketplace. She stood in the midst of trendy apparel, but her train of thought had been derailed — by Amazon, apps and free delivery offers.

“I do 80 percent of my shopping online,” said Patterson, 42. She described her weekend haul that included saving 40 percent on Under Armour apparel by letting her fingers do the walking.

“And then the day after Thanksgiving, I was at Claire’s and noticed a singing Santa hat,” she recalled. “If I ordered online, I would get 50 percent off, and shipping was free. The store would not match that price.”

But after this season, online retailers will lose one of their advantages over their traditional competitors: Sales tax savings.

For years, many online retailers have en able to offer merchandise to out-of-state buyers without paying state and local sales tax. But the U.S. Supreme Court in June ruled that states can compel internet retailers to collect sales taxes even in states where they have no physical presence.

The decision was a relief for brick-and-mortar businesses, which have long complained of a playing field tilted toward their online competitors. States such as Texas, meanwhile, have said they were losing billions of dollars in potential tax revenue, even though some larger online retailers such as Amazon already pay sales tax.

The change won’t happen immediately. The Texas Comptroller’s Office, which collects sales taxes and sends rebates to local taxing entities, prepared proposed legislation on online sales in October. In January the office will produce a formal estimate of the impact on state finances.

Texas lawmakers will take up the Comptroller’s Office proposal in January. Under the proposal, sellers with annual revenues of more than $500,000 would have to pay the state sales tax rate of 6.25 cents per $1, plus 1.75 cents for local entities.

Passage of the bill would mean retailers outside Texas would escape the bookkeeping nightmare of researching the sales tax rates of 1,500 taxing entities statewide, said Kevin Lyons, a comptroller spokesman.

“Someone ordering online from Corpus Christi would pay the same rate as someone ordering online from Waco,” he said.

As for Texas buyers perusing the web for bargains elsewhere, they must comply with the rules imposed within each state. Those issues do not fall under the jurisdiction of the Texas Comptroller’s Office, and there remains no national consensus, said Lyons, speaking by phone.

He said online shoppers should remember that the process revolves around the seller. Buyers in Texas ordering merchandise online from a shop in Alabama, California or New York pay what those states demand.

Local shoppers pay an 8.25 percent sales tax on every dollar spent on qualifying goods and services, with 6.25 cents going to the state. Waco and McLennan County receive rebates on the balance.

If lawmakers approve the Comptroller’s Office online tax proposal, it would become the rule of law in October 2019, in time for the next Cyber Monday.

Travis Allison and Lauren Allison, who were shopping Sunday at Target with their nearly 8-month-old daughter, Carli Jo, said they are avid online shoppers. Paying a sales tax likely would not alter their buying habits. They already do so on items they buy from big-name retailers.

“We’re big Amazon people,” said Lauren Allison, a McGregor resident and X-ray technician at Baylor Scott & White Medical Center in Temple. “We’re sold on the convenience, and it’s much easier now that we have her.”

But Brandie Fillip, 44, from Robinson, who visited Kohl’s over the weekend, described herself as an unabashed “in-store type of person.”

“I want to touch it and feel it,” she said.

The National Retail Federation suggests the web and Walmart, among other retailers, can peacefully co-exist. Larger chains tout their online bargains, and dangle the best of both worlds by offering in-store pickup.

“We do not see online sales as a threat, not at all,” said Ana Smith, spokeswoman for the retail advocacy group, speaking by phone. “Our research shows 89 percent of all U.S. retail sales take place in physical stores. But if you want to connect with consumers of all ages, you need to put them in a position to interact using social media tools. Online sales are just one of many channels retailers should leverage in their approach.”

Several high-profile businesses locally have an online presence, including Magnolia Market at the Silos, Bicycle World, Bankston’s Collectibles and WRS Group, whose divisions sell medical-related instructional items.

Waco-based American Domino Co., formerly Puremco, has a shop in Lacy Lakeview, but also fills online orders from around the nation.

“Oh, my gosh, we get thousands,” said manager Erica Gray, speaking by phone. She said the holidays represent the company’s busiest time, and sets of tournament-size double-six dominoes are the most requested. They range in price from $30 to $80, depending on the degree of detail.

“Some of our customers do pay sales tax, but not all. Some buy in bulk as gifts to employees,” said Gray, adding she has heard of the changes in law and plans to research their application to American Dominoes.

Dick’s Sporting Goods, which this year opened its first Waco store, was offering 25-percent-off sales on an array of online merchandise.

Walmart.com released a statement saying iPads and TVs, gaming consoles and video games were selling well online, as were toys such as Legos and L.O.L Surprise Dolls, and home products such as Dyson vacuum cleaners and Pioneer Woman baking sets. “Interestingly,” said the Walmart statement released late Monday, “classic board games were also top sellers, including Connect 4, Sorry!, Chutes and Ladders and Candy Land.”


Business
spotlight
Waco restaurants, lettuce growers ride out romaine recall
 Lauren Dodd  / 
 11.26.18

Local restaurants and lettuce farmers are adapting to life without romaine.

A week after the Centers for Disease Control and Prevention advised Americans to toss out all romaine lettuce due to an E. coli outbreak that has sickened 43 people in 12 states, restaurants have been scrambling for leafy green substitutes.

When the recall hit just before Thanksgiving, Vanessa Castaneda, general manager of McAlister’s Deli, located at 4551 W. Waco Drive, tossed out 16 pounds of romaine and spring mix lettuce that had romaine in it.

Since then, her wholesale food supplier ran out of other varieties of lettuce as the demand for greens increased, forcing Castaneda to make do with what iceberg lettuce she can find at the grocery store.

“We’re having to run to H-E-B to get some lettuce, I know a lot of us (restaurants) are going there, too,” Castaneda said. “So it’s been pretty difficult.”

Federal health officials late Monday issued a modified warning, as Food and Drug Commissioner Scott Gottlieb said that romaine may be eaten if it is known to be produced outside of California or if it comes from hydroponic or greenhouse sources.

Before that clarification, too much supply, not demand, was the issue at Mission Waco’s Urban REAP greenhouse next to its nonprofit Jubilee Food Market at Fifteenth Street and Colcord Avenue.

The greenhouse uses “aquaponic” agriculture methods to grow both vegetables and fish, avoiding the typical sources of E. coli, namely cattle and poultry manure. But in an abundance of caution, Mission Waco suspended its romaine lettuce harvest after the federal advisory, creating a surplus of lettuce waiting in limbo.

“We haven’t sold it, because we didn’t know what to do,” said Mission Waco founder Jimmy Dorrell. “But there’s no way it could be infected. It’s really an awkward kind of deal.”

Little is known about the origin of the contaminated lettuce that caused the most recent health alert, other than it seems to have come from California’s Central Valley. It’s not the first time romaine has caused problems. A similar E. coli outbreak from romaine lettuce in April left 210 people in 36 states sick, including four from Texas, and five people dead.

Not everyone is reeling from the romaine moratorium. One local grower is actually reaping the benefits as area restaurants seek out a safe alternative.

Urban Produce, a wholesale hydroponic greenhouse in South Waco, saw a 50 percent spike in non-romaine lettuce sales in the past week. With a focus on butter, red and green lettuce varieties, Urban Produce sells about 6,000 heads of lettuce a week to supermarkets, restaurants and food wholesalers.

“The demand for our products has skyrocketed because there is now a huge void in the marketplace of romaine lettuce,” Urban Produce General Manager Toby Tull said. “I hate to say that because I know a lot of farmers are suffering because of it.”

The company is able to avoid the risk of fertilizer contamination through a water-based produce farming method.

“A lot of people prefer hydroponic lettuce because it’s grown in a sterile environment so it drastically reduces risk from a grower perspective and a manufacturing perspective. There’s very little chance for contamination,” Tull said. “More and more people are starting to grow more things hydroponically.”

While the FDA and states work to trace the origin of the outbreak, traditional Texas vegetable farmers are taking extra precaution to ensure safe handling of all vegetables.

“Usually they (the FDA) at least know what state, and a lot of times they know what grower or what shipper, was the source,” Hidalgo County AgriLife agent Brad Cowan said. “It’s really concerning to everyone when they issue such a broad recall as this because it’ll affect lots of lettuce that is perfectly safe to consume.”


AP
NASA spacecraft lands on red planet after six-month journey
 
 11.26.18

CAPE CANAVERAL, Fla. — A NASA spacecraft designed to drill down into Mars’ interior landed on the planet Monday after a perilous, supersonic plunge through its red skies, setting off jubilation among scientists who had waited in white-knuckle suspense for confirmation to arrive across 100 million miles of space.

Flight controllers at NASA’s Jet Propulsion Laboratory in Pasadena, California, leaped out of their chairs, screaming, dancing and hugging, upon learning that InSight had arrived on Mars, the graveyard for a multitude of previous missions.

“Touchdown confirmed!” a flight controller called out just before 3 p.m. EST, instantly dispelling the anxiety that had gripped the control room as the spacecraft made its six-minute descent.

Because of the distance between Earth and Mars, it took eight minutes for confirmation to arrive, relayed by a pair of tiny satellites that had been trailing InSight throughout the six-month, 300-million-mile journey.

The two satellites not only transmitted the good news in almost real time, they also sent back InSight’s first snapshot of Mars just 4½ minutes after landing.

The picture was speckled with dirt because the dust cover was still on the lander’s camera, but the terrain around the spacecraft looked smooth and sandy with just one sizable rock visible — pretty much what scientists had hoped for. Better photos are expected in the days ahead, after the dust covers come off.

It was NASA’s — indeed, humanity’s — eighth successful landing at Mars since the 1976 Viking probes, and the first in six years. NASA’s Curiosity rover, which arrived in 2012, is still on the move on Mars.

“Flawless,” declared JPL’s chief engineer, Rob Manning. “This is what we really hoped and imagined in our mind’s eye,” he added. “Sometimes things work out in your favor.”

NASA Administrator Jim Bridenstine, presiding over his first Mars landing as the space agency’s boss, said: “What an amazing day for our country.”

InSight, a $1 billion international project, includes a German mechanical mole that will burrow down 16 feet to measure Mars’ internal heat. The lander also has a French seismometer for measuring quakes, if they exist on our smaller, geologically calmer neighbor. Another experiment will calculate Mars’ wobble to reveal the makeup of the planet’s core.

“In the coming months and years even, history books will be rewritten about the interior of Mars,” said JPL’s director, Michael Watkins.

Seven hours after touchdown, NASA reported that InSight’s vital solar panels were open and recharging its batteries.

Over the next few “sols” — or Martian days of 24 hours, 39½ minutes — flight controllers will also assess the health of InSight’s all-important robot arm and its science instruments.

Many Mars-bound spacecraft launched by the U.S., Russia and other countries have been lost or destroyed over the years, with a success rate of just 40 percent, not counting InSight.

NASA went with its old, straightforward approach this time, using a parachute and braking engines to get InSight’s speed from 12,300 mph when it pierced the Martian atmosphere, about 77 miles up, to 5 mph at touchdown. The danger was that the spacecraft could burn up in the atmosphere or bounce off it.

The three-legged InSight settled on the western side of Elysium Planitia, the plain that NASA was aiming for. Project manager Tom Hoffman said the spacecraft landed close to the bull’s-eye, but NASA did not have yet have the final calculations.

He said that it was hard to tell from the first photo whether there were any slopes nearby, but that it appeared he got the flat, smooth “parking lot” he was hoping for.

Museums, planetariums and libraries across the U.S. held viewing parties to watch the events unfold at JPL. NASA TV coverage was also shown on the giant screen in New York’s Times Square, where crowds huddled under umbrellas in the rain.

The 800-pound InSight is stationary and will operate from the same spot for the next two years, the duration of a Martian year.


Courts_and_trials
Release of witness for capital murder trial delayed by red tape
 Tommy Witherspoon  / 
 11.26.18

Testimony in the trial of a Hewitt man charged in an alleged murder-for-hire scheme was delayed Monday by a last-minute bureaucratic mix-up involving a prosecution witness in federal custody.

Judge Matt Johnson seated a 54th State District Court jury Monday in the capital murder trial of Tyler Sherrod Clay. However, the judge did not swear in the jury and told them to return to court Wednesday morning.

The judge explained only that the delay was caused by a “scheduling issue” before recessing the jurors for the evening.

Clay, 29, of Hewitt, is charged with hiring Keith Antoine Spratt, 30, of Waco, to kill Joshua Ladale Pittman in December 2015. Pittman, 37, was shot several times in the chest at an East Waco convenience store.

Late Monday afternoon, prosecutors Robert Moody, Hilary LaBorde and Christi Hunting Horse informed the judge that a federal prisoner that they described as an important material witness in the case was in bureaucratic limbo and might not be available to testify until later in the week.

Johnson chose not to swear in the jury panel so that he would have the option to release this jury and seat a new one later if the delays became excessive.

Moody explained that the witness had been brought from a federal prison in Beaumont to testify in a federal matter in Waco. Federal prosecutors released him as a witness and he remained in the private Jack Harwell Detention Center in Waco Monday afternoon.

However, federal officials told prosecutors Monday that the witness would have to be returned to federal prison in Beaumont before the state witness writ could be processed. Only then could he be returned to Waco to testify in Clay’s trial.

Clay’s attorney, Randy Schaffer, of Houston, suggested that officials could expedite Clay’s trial by capturing the witness’s testimony on video at the Jack Harwell facility before the witness is sent back.

Johnson said the issue of getting federal prisoners brought to state court to testify is not a new problem. He said federal authorities, including those at the federal Bureau of Prisons, abide by their own regulations and pay little attention to requests from state officials.

Schaffer was critical of the prosecution team, calling their efforts to secure the witness “dilatory” or sluggish. He said that by waiting until so late to line up witnesses, prosecutors failed to use due diligence.

LaBorde told the judge that the witness is absolutely necessary to the state’s case because he was at the scene when the shooting occurred and is the only one who can identify Spratt as the gunman, despite the shooter wearing a mask.

Waco police reported that Pittman had been involved in multiple robberies and said Pittman “set up” Spratt and Clay to be robbed. That led to Spratt and Clay conspiring to murder Pittman, Waco police officials said.

Pittman was shot by a masked man at the Pick N Pay Foodmart, 504 Faulkner Lane, about 11 p.m. Dec. 23, 2015. No suspects were identified immediately after the shooting, and the case remained open for 18 months.

According to arrest warrant affidavits, Pittman robbed Clay earlier in 2015, and Clay hired Spratt to murder Pittman in retaliation. Confidential sources also identified Spratt as the shooter, and detectives were told Spratt received payment from Clay for the murder, according to the documents.

Johnson likely will hear testimony from other inmates Tuesday outside the presence of the jury. Schaffer wants to determine what, if anything, the inmates have been offered or if they have expectation of help on their paroles in exchange for their testimonies against Clay.


Elections
Early voting starts Wednesday for Hewitt runoff
 Cassie L Smith  / 
 11.26.18

Early voting begins Wednesday in the Dec. 15 runoff election to fill the vacant at-large seat on the Hewitt City Council.

The city held a special election Nov. 6 after a council member resigned this summer, but none of the eight candidates for the seat won a majority. The top vote-getters, Erica Bruce and Betty Orton, are on the Dec. 15 ballot.

Early voting runs 8 a.m. to 5 p.m. Wednesday through Friday, with the same hours Dec. 3-7. Extended voting hours are 7 a.m. to 7 p.m. Dec. 10-11. The Hewitt Public Safety Facility, 100 Patriot Court, is the sole voting location for early voting and election day.

Whoever wins the runoff will serve until the term ends with the May 4 election. The at-large seat has been vacant since Councilman Kurt Krakowian resigned in July after five months in office. He had been appointed by the rest of the council to replace Alex Snider, who had to resign when he moved out of the city for work reasons.

Bruce was the front-runner during the November election, capturing 1,408 votes, or 32.7 percent, while Orton brought in 806 votes, or 18.7 percent.

Bruce, 43, is a toxicologist and medical researcher at Baylor University. She has said her engineering training makes her a problem solver. She has said the city can not continue to incur debt at the current rate.

Orton, 81, retired in 1998 after working as Hewitt city secretary for 19 years. She has said her knowledge of city operations will mean a short learning curve, and she hopes to bring healing back to the council.

More than 6,000 Hewitt residents voted in the November midterm election. About 14,400 people live in Hewitt.

On election day, Dec. 15, the vote center will be open from 7 a.m. to 7 p.m.

Applications for ballot by mail must be mailed by Dec. 4. to:

  • Kathy E. Van Wolfe
  • McLennan County Elections Administrator
  • P.O. Box 2450
  • Waco, Texas 76703-2450
  • kathy.vanwolfe@co.mclennan.tx.us