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Income Taxes (Notes) | 6 Months Ended
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Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense was $7,079 and $11,019 for the three and six months ended December 31, 2015, respectively, as compared to $3,850 and $6,082 for the same prior year periods. The increase in income tax expense is attributable to a higher consolidated annual effective tax rate forecasted for fiscal 2016 as compared to fiscal 2015. We are forecasting a higher annual effective tax rate in fiscal 2016 due to an expected decrease to, and less favorable geographical mix of, consolidated pre-tax earnings combined with an increase in losses in certain jurisdictions where we are unable to recognize a full tax benefit in the current period. We also have losses in certain jurisdictions where we are able to recognize a tax benefit in the current period, but for which the cash benefit is expected to be realized in a future period. For the three months ended December 31, 2015, we recognized a tax benefit of $1,422 from a reduction in deferred tax liabilities due to future tax rate decreases in Italy and the UK and a current tax benefit of $2,276 related to the extension of the US R&D credit, all of which were enacted into law during the quarter. Additionally, income tax expense for the same period in fiscal 2015 was reduced by $943 related to a reduction in our net liability for unrecognized tax benefits. On October 1, 2013, we made changes to our corporate entity operating structure, including transferring our intellectual property among certain of our subsidiaries, primarily to align our corporate entities with our evolving operations and business model. The transfer of assets occurred between wholly owned legal entities within the Cimpress group that are based in different tax jurisdictions. As the impact of the transfer was the result of an intra-entity transaction, any resulting gain or loss and immediate tax impact on the transfer was eliminated and not recognized in the consolidated financial statements under U.S. GAAP. The transferor entity recognized a gain on the transfer of assets that was not subject to income tax in its local jurisdiction. However, the recipient entity will receive a tax benefit associated with the future amortization of the fair market value of the intellectual property received, which for tax purposes will occur over a period of five years in accordance with the applicable tax laws. As of December 31, 2015, we had a net liability for unrecognized tax benefits included in the balance sheet of approximately $4,501, including accrued interest of $149. We recognize interest and, if applicable, penalties related to unrecognized tax benefits in the provision for income taxes. During the three months ended December 31, 2015, we recognized a decrease in the net liability of $747 primarily due to the settlement of a tax audit during the quarter. Of the total amount of unrecognized tax benefits, approximately $1,865 will reduce the effective tax rate if recognized. It is reasonably possible that a further reduction in unrecognized tax benefits in the range of $400 to $500 may occur within the next twelve months related to the lapse of applicable statutes of limitations. We believe we have appropriately provided for all tax uncertainties. We conduct business in a number of tax jurisdictions and, as such, are required to file income tax returns in multiple jurisdictions globally. The years 2012 through 2015 remain open for examination by the United States Internal Revenue Service (“IRS”) and the years 2011 through 2015 remain open for examination in the various states and non-US tax jurisdictions in which we file tax returns. One of our subsidiaries, Cimpress USA Incorporated, had been under income tax audit and subsequent administrative appeal by the Massachusetts Department of Revenue ("DOR") for the tax years 2006-2008 and 2010-2011. In December 2015, we reached an agreement with the DOR to settle this matter for $1,495. This audit is now officially concluded, and our tax balances have been updated accordingly. We believe that our income tax reserves are adequately maintained taking into consideration both the technical merits of our tax return positions and ongoing developments in our income tax audits. However, the final determination of our tax return positions, if audited, is uncertain, and there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows.

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