SECTION 5. HIGH-LOW

SUBSTANTIATION METHOD

.01 General rule . If a payor pays a per diem allowance in lieu of reimbursing actual expenses for lodging, meal, and incidental expenses incurred or to be incurred by an employee for travel away from home and the payor uses the high-low substantiation method described in this section 5 for travel within CONUS, the amount of the expenses that is deemed substantiated for each calendar day (or part of the calendar day, see section 6.04) is equal to the lesser of the per diem allowance for such day or the amount computed at the rate set forth in section 5.02 for the locality of travel for such day (or part of such day, see section 6.04). This high-low substantiation method may be used in lieu of the per diem substantiation method provided in section 4.01, but may not be used in lieu of the meals only substantiation method provided in section 4.02 or 4.03.

.02 Specific high-low rates . The per diem rate set forth in this section 5.02 is $152 for travel to any ‘‘high-cost locality’’ specified in section 5.03, or $95 for travel to any other locality within CONUS. Whichever per diem rate applies, it is applied as if it were the Federal per diem rate for the locality of travel. For purposes of applying the high-low substantiation method, the Federal M&IE rate shall be treated as $36 for a high-cost locality and $28 for any other locality within CONUS.

.03 High-cost localities . The following localities have a Federal per diem rate of $123 or more for all or part of the calendar year, and are high-cost localities for all of the calendar year or the portion of the calendar year specified in parenthesis under the key city name:

Key city County and other defined location

Alabama

Gulf Shores Baldwin (May 1–September 30)

Arizona

Grand Canyon All points in the Grand Canyon National Park and Kaibab National Forest within Coconino County Phoenix/Scottsdale Maricopa (October 1–May 14)

California

Gualala/Point Arena Mendocino Los Angeles Los Angeles, Kern, Orange, and Ventura Counties; Edwards Air Force Base; Naval Weapons Center and Ordnance Test Station, China Lake Palo Alto/San Jose Santa Clara San Francisco San Francisco Santa Barbara Santa Barbara (June 1–September 30) South Lake Tahoe El Dorado Yosemite Nat’l Park Mariposa

Colorado

Aspen Pitkin (January 15–March 31) Boulder Boulder (May 1–October 31) Denver Denver, Adams, Arapahoe and Jefferson Keystone/Silverthorne Summit Steamboat Springs Routt (December 15–March 31) Telluride San Miquel (November 1–March 31) Vail Eagle

Connecticut

Bridgeport/Danbury Fairfield

District of Columbia

Washington, D.C. Washington, D.C.; the cities of Alexandria, Falls Church, and Fairfax, and the counties of Arlington, Loudoun, and Fairfax in Virginia; and the counties of Montgomery and Prince Georges in Maryland

Florida

Key West Monroe Naples Collier (December 15–April 30)

Illinois

Chicago Du Page, Cook, and Lake

Indiana

Nashville Brown (June 1–October 31) Maine

Bar Harbor Hancock (July 1–September 14) Rockport Knox (June 15–October 31)

Maryland

Annapolis Anne Arundel Baltimore Baltimore and Harford Ocean City Worcester (May 1–September 30)

Massachusetts

Boston Suffolk

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Key city County and other defined location

Cambridge/Lowell Middlesex Hyannis Barnstable (July 1–September 30) Martha’s Vineyard/ Dukes and Nantucket Nantucket

Michigan

Detroit Wayne Leland Leelanau (May 1–September 30) Mackinac Island Mackinac (June 1–September 30) Traverse City Grand Traverse (May 1–September 30)

Nevada

Incline Village Incline Village Stateline Douglas

New Jersey

Atlantic City Atlantic (April 1–November 30) Newark Bergen, Essex, Hudson, Passaic and Union Ocean City/Cape May Cape May Parsippany/Dover Morris County; Picatinny Arsenal Princeton/Trenton Mercer

New Mexico

Santa Fe Santa Fe

New York

Lake Placid Essex (June 1–November 14) New York City The boroughs of Bronx, Brooklyn, Manhattan, Queens, and Staten Island; Nassau and Suffolk Counties White Plains Westchester

North Carolina

Duck/Outer Banks Dare (May 1–September 30)

Ohio

Sandusky Erie (May 1–September 30)

Oregon

Crater Lake/Klamath Klamath Falls

Pennsylvania

Philadephia Philadelphia; city of Bala Cynwyd in Montgomery County Valley Forge/Malvern Chester

Rhode Island

Newport Newport (May 1–October 14) Providence Providence

South Carolina

Myrtle Beach Horry County; Myrtle Beach Air Force (May 1–September 30) Base

Utah

Bullfrog Garfield (April 1–October 31) Park City Summit (December 1–March 31)

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Key city County and other defined location Virginia

Virginia Beach Virginia Beach, Norfolk, Portsmouth and Chesapeake (May 1–September 30) Wintergreen Nelson Wisconsin

Wisconsin Dells Columbia (June 1–September 14) Wyoming

Jackson Teton (June 1–October 14)

.04 Changes in high-cost localities . The list of high-cost localities in section 5.03 of this Revenue Procedure differs from the list of high-cost localities in section 5.03 of Rev. Proc. 94–77. The following localities have been added to the list of high-cost localities: Phoenix/Scottsdale, Arizona (October 1–May 14); Palo Alto/San Jose, California, and Santa Barbara, California (June 1–September 30); Boulder, Colorado, Denver, Colorado, and Telluride, Colorado (November 1– March 31); Bridgeport/Danbury, Connecticut; Nashville, Indiana (June 1– October 31); Annapolis, Maryland, and Baltimore, Maryland; Detroit, Michigan, Leland, Michigan (May 1– September 30), and Traverse City, Michigan (May 1–September 30); Incline Village, Nevada; Parsippany/ Dover, New Jersey, and Princeton/ Trenton, New Jersey; Outer Banks, North Carolina (May 1–September 30); Sandusky, Ohio (May 1–September 30); Crater Lake/Klamath, Oregon; Valley Forge/Malvern, Pennsylvania; Providence, Rhode Island; and Park City, Utah (December 1–March 31). The portion of the year for which the following are high-cost localities has been changed: Gulf Shores, Alabama (May 1–September 30); South Lake Tahoe, California (all year); Steamboat Springs, Colorado (December 15– March 31), and Vail, Colorado (all year); Naples, Florida (December 15– April 30); Bar Harbor, Maine (July 1– September 14), and Rockport, Maine (June 15–October 31); Hyannis, Massachusetts (July 1–September 30); Stateline, Nevada (all year); Ocean City/ Cape May, New Jersey (all year); Santa Fe, New Mexico (all year); and Bullfrog, Utah (April 1–October 31). The following localities have been removed from the list of high-cost localities: Chinle, Arizona; Death Valley, California, and Santa Cruz, California; Durango, Colorado; Fort Myers, Florida;

Columbia, Maryland; and Chestor/ Radnor, Pennsylvania.

.05 Specific limitation . A payor that uses the high-low substantiation method with respect to an employee must use that method for all amounts paid to that employee for travel away from home within CONUS during the calendar year. However, with respect to that employee, the payor may still reimburse actual expenses or use the meals only per diem method described in section 4.02 for any travel away from home, and may use the per diem substantiation method described in section 4.01 for any OCONUS travel away from home.