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

Key city County or other defined location

Alabama

Gulf Shores Baldwin (May 1-September 30)

California

Gualala City limits of Gualala Palo Alto City limits of Palo Alto San Francisco San Francisco Sunnyvale City limits of Sunnyvale Yosemite Nat’l Park Mariposa (April 1-October 31)

Colorado

Aspen Pitkin (June 1-March 31)

1998–52 I.R.B. 35 December 28, 1998

Key city County or other defined location

Telluride San Miguel (November 1-March 31) Vail Eagle

District of Columbia

Washington, D.C. District of Columbia

Florida

Delray Beach City limits of Delray Beach (November 1-March 31) Jupiter City limits of Jupiter (January 1-April 30) Key West Monroe (December 1-April 30) Palm Beach City limits of Palm Beach (January 1-April 30) Singer Island City limits of Singer Island (January 1-April 30)

Idaho

Sun Valley City limits of Sun Valley (April 1-September 30)

Illinois

Chicago Cook Lake County Lake County

Maine

Bar Harbor Hancock

Maryland

Baltimore Baltimore Montgomery County Montgomery County Ocean City Worcester (April 1-August 31)

Massachusetts

Boston Suffolk Cambridge City limits of Cambridge Martha’s Vineyard Dukes (June 1-September 30)

Michigan

Charlevoix Charlevoix (July 1-September 30) Mackinac Island Mackinac

Nevada

Stateline Douglas

New Jersey

Cape May Cape May (except Ocean City) (June 1-September 30) Ocean City City limits of Ocean City (June 1-August 31) Piscataway City limits of Piscataway Union County Union County

New York

The Bronx The Bronx Brooklyn Brooklyn

December 28, 1998 36 1998–52 I.R.B.

Key city County or other defined location

Manhattan Manhattan Queens Borough Queens Saratoga Springs Saratoga (August 1-August 31) Tarrytown/White Plains Westchester West Point Orange

North Carolina

Kill Devil Hills Dare (May 1-August 31)

Pennsylvania

Hershey City limits of Hershey (May 1-October 31) Philadelphia Philadelphia; city of Bala Cynwyd in Montgomery County Rhode Island

Newport Newport (June 1-September 30)

South Carolina

Hilton Head Beaufort (March 1-August 31) Myrtle Beach Horry; Myrtle Beach Air Force Base (June 1-September 30)

Utah

Park City Summit (December 1-March 31)

Virginia

Alexandria City limits of Alexandria Arlington Arlington Fairfax County Fairfax County (includes the cities of Falls Church and Fairfax) Wintergreen Nelson (June 1-October 31)

Washington

Seattle King

.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. 97–59.

(1) The following localities (listed by key cities) have been added to the list of high-cost localities: Gulf Shores, Alabama; Sunnyvale, California; Yosemite National Park, California; Delray Beach, Florida; Jupiter, Florida; Palm Beach, Florida; Singer Island, Florida; Sun Valley, Idaho; Charlevoix, Michigan; Mackinac Island, Michigan; Stateline, Nevada; Piscataway, New Jersey; Union County, New Jersey; Saratoga Springs, New York; West Point, New York; Hershey, Pennsylvania; and Wintergreen, Virginia.

(2) The portion of the year for which the following are high-cost localities (listed by key cities) has been changed: Aspen, Colorado; Telluride, Colorado; Vail, Colorado; Key West, Florida; Bar Harbor, Maine; Ocean City, Maryland; Martha’s Vineyard, Massachusetts; Cape May, New Jersey; Ocean City, New Jersey; Kill Devil Hills, North Carolina; Newport, Rhode Island; Hilton Head, South Carolina; and Myrtle Beach, South Carolina.

(3) The following localities (generally listed by key cities) have been removed from the list of high-cost localities: Grand Canyon, Arizona; Los Angeles, California; Napa, California; Santa Clara County, California (except the city limits of Palo Alto and Sunny

vale); Mendocino County, California (except the city limits of Gualala); Keystone/Silverthorne, Colorado; Lewes, Delaware; Naples, Florida; Du Page County, Illinois; Nashville, Indiana; Harford County, Maryland; Prince George’s County, Maryland; St. Michaels, Maryland; Middlesex County, Massachusetts (except the city limits of Cambridge); Nantucket, Massachusetts; Incline Village, Nevada; Hanover, New Hampshire; Parsippany/Dover, New Jersey; Santa Fe, New Mexico; Nassau County, New York; Staten Island Borough, New York; Suffolk County, New York; Block Island, Rhode Island; Loudoun County, Virginia; Friday Harbor, Washington; and Jackson, Wyoming.

1998–52 I.R.B. 37 December 28, 1998

.05 Specific limitation.

(1) Except as provided in section 5.05(2) of this revenue procedure, 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.

(2) With respect to an employee described in section 5.05(1) of this revenue procedure, the payor may reimburse actual expenses or use the meals only per diem method described in section 4.02 of this revenue procedure for any travel away from home, and may use the per diem substantiation method described in section 4.01 of this revenue procedure for any OCONUS travel away from home.