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

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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 is equal only substantiation method provided in section 4.02 or 4.03 of this revenue procedure.

.02 Specific high-low rates . Except as provided in section 5.06 of this revenue procedure, the per diem rate set forth in this section 5.02 is $201 for travel to any

“high-cost locality” specified in section 5.03 of this revenue procedure, or $124 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 and the § 274(n) limitation on meal expenses (see section 6.05 of this revenue procedure), the federal M&IE rate shall be treated as $42 for a high-cost locality and $34 for any other locality within CONUS.

.03 High-cost localities . The following localities have a federal per diem rate of $163 or more, 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, except as provided in section 5.06 of this revenue procedure:

Key city County or other defined location

California

Palm Springs Riverside (January 1-May 31) San Francisco San Francisco Sunnyvale/Palo Alto/San Jose Santa Clara Tahoe City Placer

Colorado

Aspen Pitkin (January 1-April 30) Silverthorne/Keystone Summit Telluride San Miguel (January 1-March 31) Vail Eagle (July 1-March 31)

District of Columbia

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

Key West Monroe (January 1-April 30)

Idaho

Sun Valley City limits of Sun Valley Illinois

Chicago Cook and Lake Louisiana

New Orleans/St. Bernard Orleans, St. Bernard, Plaquemine, (January 1-May 31) and Jefferson Parishes

Maryland

(For the counties of Montgomery and Prince George’s, see District of Columbia) Ocean City Worcester (June 15-October 31)

Massachusetts

Boston Suffolk Cambridge Middlesex County (except Lowell) Martha’s Vineyard Dukes (June 1-October 15)

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Michigan

Mackinac Island Mackinac Traverse City Grand Traverse (June 1-September 30)

Montana

Big Sky Gallatin (except West Yellowstone Park) (November 1-April 30)

New Jersey

Cape May Cape May (except Ocean City) (June 1-November 30) Ocean City City limits of Ocean City (June 15-September 15) Piscataway/Belle Mead Somerset and Middlesex Princeton/Trenton Mercer County

New York

The Bronx/Brooklyn/Queens The boroughs of The Bronx, Brooklyn, and Queens

Manhattan Manhattan Nassau County/Great Neck Nassau County Suffolk County Suffolk County White Plains City limits of White Plains

Pennsylvania

Hershey City limits of Hershey (June 1-September 15) Philadelphia Philadelphia

Utah

Park City Summit (December 15-March 31)

Virginia

(For the cities of Alexandria, Fairfax, and Falls Church, and the counties of Arlington, Fairfax, and Loudoun, see District of Columbia) Wintergreen Nelson

.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. 2000-9.

(1) The following localities (listed by key cities) have been added to the list of high-cost localities: Palm Springs, California; New Orleans/St. Bernard, Louisiana; Traverse City, Michigan; Trenton, New Jersey; 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; Sun Valley, Idaho; Ocean City, Maryland; Martha’s Vineyard, Massachusetts; Big Sky, Montana; Cape May, New Jersey; and Park City, Utah.

(3) The following localities (generally listed by key cities) have been removed

from the list of high-cost localities: Charlevoix, Michigan, and Union County, New Jersey.

. 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. See section 5.06 of this revenue procedure for transition rules.

(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.

.06 Transition rules . A payor who used the substantiation method of section 4.01 of Rev. Proc. 2000-9 for an employee during the first 9 months of calendar year 2000 may not use the High-Low Substantiation Method in section 5 of this revenue procedure for that employee until January 1, 2001. A payor who used the High-Low Substantiation Method of section 5 of Rev. Proc. 2000-9 for an employee during the first 9 months of calendar year 2000 must continue to use the High-Low Substantiation Method for the remainder of calendar year 2000 for that employee. A payor described in the previous sentence may use the rates and high-cost localities published in section 5 of Rev. Proc. 20009, in lieu of the updated rates and highcost localities provided in section 5 of this

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revenue procedure, for travel on or after October 1, 2000, and before January 1, 2001, if those rates and localities are used consistently during this period for all employees reimbursed under this method.