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Income Taxes (Notes) | 9 Months Ended
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Mar. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax (benefit) expense was $(162) and $10,857 for the three and nine months ended March 31, 2016, respectively, as compared to $1,576 and $7,658 for the same prior year periods. The tax benefit recognized for the three months ended March 31, 2016 is primarily due to tax benefits associated with currency exchange losses and the manufacturing equipment abandonment loss described in Note 2. The increase in income tax expense for the nine months ended March 31, 2016 as compared to the same period ended in 2015 is primarily 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 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. The acquisition of WIRmachenDRUCK has also contributed to the increase in our tax expense for the nine months ended March 31, 2016. Additionally, during the nine months ended March 31, 2016, 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 $2,140 related to the extension of the US R&D credit. 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. The impairment loss on goodwill described in Note 8 is nondeductible for tax purposes, and, accordingly, no tax benefit has been recorded related to this item. However, the reduction to pretax earnings does have an unfavorable impact on our effective tax rate for the quarter. 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. Our subsidiary based in Switzerland was the recipient of the intellectual property. In accordance with Swiss tax law, we are entitled to amortize the fair market value of the intellectual property received at the date of transfer over five years for tax purposes. As of March 31, 2016, we had a net liability for unrecognized tax benefits included in the balance sheet of approximately $4,023, including accrued interest of $103. We recognize interest and, if applicable, penalties related to unrecognized tax benefits in the provision for income taxes. During the nine months ended March 31, 2016, we recognized a decrease in the net liability of $477 primarily due to the expiration of certain statutes of limitations during the quarter. Of the total amount of unrecognized tax benefits, approximately $1,837 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 2013 through 2015 remain open for examination by the United States Internal Revenue Service 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. 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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