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 highlow 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 $166 for travel to any ‘‘high-cost locality’’ specified in section 5.03, or $109 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 $40 for a high-cost locality and $32 for any other locality within CONUS.

.03 High-cost localities. The following localities have a Federal per diem rate of $138 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

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)

Maricopa

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 South Lake Tahoe El Dorado Yosemite Nat’l Park Mariposa

(April 1–October 31)

Mariposa

Colorado

Aspen

(January 15–March 31)

Pitkin

Keystone/Silverthorne Summit Steamboat Springs Routt

(December 1–March 31)

Routt

Telluride San Miquel Vail Eagle

(November 1–March 31)

Eagle

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

Illinois

Chicago Du Page, Cook, and Lake

Indiana

Nashville

(June 1–October 31)

Maine

Bar Harbor

(July 1–September 14)

Maryland

Ocean City

(May 1–September 30)

Brown

Hancock

Worcester

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Key city County and other defined location

Saint Michaels Talbot

Massachusetts

Boston Suffolk Cambridge/Lowell Middlesex Hyannis Barnstable

(July 1–September 30)

Barnstable

Martha’s Vineyard/Nantucket Dukes and Nantucket

Michigan

Leland

(May 1–September 30)

Island

(June 1–September 30)

Leelanau

Mackinac

Mackinac Island

Nevada

Incline Village Incline Village Stateline Douglas

New Jersey

Atlantic City

(April 1–November 30)

City/Cape May

(May 15–September 30)

Atlantic

Cape May

Santa Fe

Ocean City/Cape May

New Mexico

Santa Fe

(May 1–October 31)

New York

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

(May 1–September 30)

Ohio

Sandusky

(May 1–September 30)

Dare

Erie

Pennsylvania

Chester/Radnor Delaware Philadelphia Philadelphia; city of Bala Cynwyd in Montgomery County

Rhode Island

Newport/Block Island

(May 1–October 14)

Utah

Bullfrog

(April 1–October 31)

Park City

(December 1–March 31)

Newport and Washington

Garfield

Summit

Virginia Beach, Norfolk, Portsmouth and Chesapeake

Virginia

Virginia Beach

(May 1–September 30)

Wintergreen Nelson

Wisconsin

Wisconsin Dells

(June 1–September 14)

Columbia

Teton

Wyoming

Jackson

(June 1–October 14)

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.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. 96–28. The following localities have been added to the list of high-cost localities: Saint Michaels, Maryland; Chester/Radnor, Pennsylvania; and Block Island, Rhode Island. The portion of the year for which the following are high-cost localities has been changed: Yosemite National Park, California (April 1–October 31); Steamboat Springs, Colorado (December 1–March 31); Telluride, Colorado (all year); Vail, Colorado (November 1–March 31); Ocean City/Cape May, New Jersey (May 15–September 30); Santa Fe, New Mexico (May 1–October 31). The following localities have been removed from the list of high-cost localities: Gulf Shores, Alabama; Santa Barbara, California; Boulder, Colorado, and Denver, Colorado; Bridgeport/ Danbury, Connecticut; Naples, Florida; Rockport, Maine; Annapolis, Maryland, and Baltimore, Maryland; Detroit, Michigan, and Traverse City, Michigan; Newark, New Jersey, Parsippany/Dover, New Jersey, and Princeton/Trenton, New Jersey; Lake Placid, New York; Crater Lake/Klamath Falls, Oregon; Valley Forge/Malvern, Pennsylvania; Providence, Rhode Island; Myrtle Beach, South Carolina.

.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.