Vistaprint 2009 Annual Report Download - page 39

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, or should have been, 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 and could seek to impose sales tax collection
obligations on us even though we are engaged in online commerce and have no physical presence in
those jurisdictions. A number of states in the United States, as well as the United States Congress,
have been considering or have adopted various initiatives that could limit or supersede the Supreme
Court’s position regarding sales and use taxes on Internet sales. A number of states, including New
York, have introduced or enacted laws that create a presumption of sales tax nexus on out-of-state
internet retailers that have certain commission-based advertising arrangements with in-state marketing
affiliates. In January 2009, a complaint filed by Amazon.com in New York state court challenging the
New York law on various constitutional grounds was dismissed by the court.
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 or
modification of its current position, we could be required to collect sales and use taxes from purchasers
in the United States. 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. In
addition, 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.
Our business is dependent on the Internet, and unfavorable changes in government regulation
of the Internet and e-commerce could substantially harm our business and results of
operations.
Due to our dependence on the Internet for most of our sales, regulations and laws specifically
governing the Internet and e-commerce may have a greater impact on our operations than other more
traditional businesses. Existing and future laws and regulations, including the taxation of sales through
the Internet, may impede the growth of e-commerce and our ability to compete with traditional graphic
designers, printers and small business marketing companies, as well as desktop printing products.
These regulations and laws may cover taxation, as well as restrictions on imports and exports,
customs, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic
Form 10-K
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