Vistaprint 2007 Annual Report Download - page 34

We sell our products and services primarily through our websites and our inability to acquire or
maintain domain names for our websites could result in the loss of customers which would
substantially harm our business and results of operations.
We sell our products and services primarily through our websites. We currently own or control a
number of Internet domain names used in connection with our various websites, including
VistaPrint.com and similar names with alternate URL names, such as .net, .de and .co.uk. Domain
names generally are regulated by Internet regulatory bodies. If we lose the ability to use a domain
name in a particular country, we would be forced to either incur significant additional expenses to
market our products within that country, including the development of a new brand and the creation of
new promotional materials and packaging, or elect not to sell products in that country. Either result
could substantially harm our business and results of operations. Furthermore, the relationship between
regulations governing domain names and laws protecting trademarks and similar proprietary rights is
unclear and subject to change. We might not be able to prevent third parties from acquiring domain
names that infringe or otherwise decrease the value of our trademarks and other proprietary rights.
Regulatory bodies could establish additional top-level domains, appoint additional domain name
registrars or modify the requirements for holding domain names. As a result, we may not be able to
acquire or maintain the domain names that utilize the name VistaPrint in all of the countries in which
we currently or intend to conduct business.
Our revenues may be negatively affected if we are required to charge sales or other taxes on
purchases.
We do not collect or have imposed upon us sales or other taxes related to the products and
services we sell, except for certain corporate level taxes and value added and similar taxes in certain
jurisdictions. However, one or more jurisdictions or countries may seek to impose sales or other tax
collection obligations on us in the future. A successful assertion by one or more governments, including
any country in which we do business or sub-federal authorities such as states in the United States, that
we should be collecting sales or other taxes on the sale of our products could result in substantial tax
liabilities for past sales, discourage customers from purchasing products
from us, decrease our ability to compete with traditional retailers or otherwise substantially harm our
business and results of operations.
Currently, decisions of the United States Supreme Court restrict the imposition of obligations to
collect state and local sales and use taxes with respect to sales made over the Internet in the
United States. However, implementation of the restrictions imposed by these Supreme Court decisions
is subject to interpretation by state and local taxing authorities. While we believe that these Supreme
Court decisions currently restrict state and local taxing authorities in the United States from requiring
us to collect sales and use taxes from purchasers located within their jurisdictions, taxing authorities
could disagree with our interpretation of these decisions. Moreover, a number of states in the
United States, as well as the United States Congress, have been considering various initiatives that
could limit or supersede the Supreme Court’s position regarding sales and use taxes on Internet sales.
If any state or local taxing jurisdiction were to disagree with our interpretation of the Supreme Court’s
current position regarding state and local taxation of Internet sales, or if any of these initiatives were
adopted to address the Supreme Court’s constitutional concerns and result in a reversal of its current
position, we could be required to collect sales and use taxes from purchasers. The imposition by state
and local governments of various taxes upon Internet commerce could create administrative burdens
for us and could decrease our future revenue. A substantial amount of our business is derived from
customers in the European Union, whose tax environment is also complex and subject to changes that
would be adverse to our business.
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