Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

8.           Commitments and Contingencies

Insperity is a defendant in various lawsuits and claims arising in the normal course of business.  Management believes it has valid defenses in these cases and is defending them vigorously.  While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on our financial position or results of operations.

Pennsylvania Sales Taxes

Pennsylvania imposes a sales tax on “help supply services.”  The Pennsylvania Department of Revenue (“Department”) has maintained that PEO services constitute help supply services and are subject to the tax.  On February 21, 2012, the Pennsylvania Supreme Court (“Supreme Court”) affirmed the Appeals Court decision in the matter titled All Staffing vs. Commonwealth of Pennsylvania, which ruled that PEO services are not subject to the Pennsylvania sales tax.

Based upon our belief that our PEO services are not subject to the Pennsylvania sales tax, we filed a refund claim for $2.9 million with the Department for the sales taxes paid in error for the period April 1, 2007 through December 31, 2009.  The refund claim is still under consideration with the Department and the ultimate outcome and timing of our recovery, if any, is uncertain. Accordingly, we have not recognized any asset for the refund claim in our financial statements.  In the event we are successful in our refund claim, we will recognize a gain equal to the recovered amount.