BUG: Inserting Data into Temporary Table's Identity Column in Stored Procedure Fails (234521)

SYMPTOMS

If you run a stored procedure that inserts data into a temporary table that contains an identity column, the second and all subsequent executions of the procedure fail with the following error:

Server: Msg 544, Level 16, State 1
Cannot insert explicit value for identity column in table 'objid' when IDENTITY_INSERT is set to OFF

The following conditions produce this error:

The stored procedure must be inserting data into the Identity column.
The table involved must be a temporary table. If the table created in the store procedure is a permanent table, it will not fail.

WORKAROUND

Use any one of the following workarounds:

Create the stored procedure using WITH RECOMPILE.
Run the stored procedure using WITH RECOMPILE.
Use a permanent table instead of a temporary table.

MORE INFORMATION

To reproduce this problem, follow these steps:

Run this code to create the procedure in any database:

If exists(select * from sysobjects where name = 'ProcTemp')
	DROP PROCEDURE ProcTemp
GO

CREATE PROCEDURE ProcTemp
AS
     CREATE TABLE #TableTemp
     (IDColumn        int         IDENTITY(1, 1) NOT NULL,
         OtherColumn     char(3)     NULL)

     SET IDENTITY_INSERT #TableTemp ON

     INSERT
         INTO        #TableTemp
                     (IDColumn, OtherColumn)
         VALUES      (7298435,  "jhd")

    SET IDENTITY_INSERT #TableTemp OFF
GO