IRS High-Cost Localities List for the High-Low Method

The IRS high-cost localities list identifies the cities and counties where business travelers qualify for the higher of two flat per diem rates under the high-low substantiation method. For travel on or after October 1, 2025 through September 30, 2026, that high-cost rate is $319 per day; every other continental U.S. destination falls under the $225 standard rate.¹ The list appears in Notice 2025-54 and is unchanged from the prior year.

Some entries are year-round. Many are seasonal, meaning the $319 rate applies only during the listed date range and the destination reverts to the $225 standard rate outside those months.

2025–2026 High-Cost Localities

The following localities carry the high-cost designation under Notice 2025-54, effective October 1, 2025 through September 30, 2026.¹ Where dates span the entire fiscal year, the locality qualifies year-round.

Alabama

Gulf Shores (Baldwin County): June 1 – July 31

Arizona

Phoenix/Scottsdale (Maricopa County): February 1 – March 31
Sedona (city limits only): October 1 – December 31 and March 1 – September 30

California

Los Angeles (Los Angeles, Orange, and Ventura Counties, plus Edwards AFB, excluding the city of Santa Monica): year-round
Mammoth Lakes (Mono County): December 1 – March 31
Monterey (Monterey County): year-round
Napa (Napa County): October 1 – November 30 and February 1 – September 30
Palm Springs (Riverside County): October 1 – April 30
San Diego (San Diego County): year-round
San Francisco (San Francisco County): year-round
San Luis Obispo (San Luis Obispo County): June 1 – July 31
Santa Barbara (Santa Barbara County): year-round
Santa Monica (city limits only): year-round
South Lake Tahoe (El Dorado County): December 1 – March 31
Sunnyvale/Palo Alto/San Jose (Santa Clara County): year-round
Yosemite National Park (Mariposa County): January 1 – April 30

Colorado

Aspen (Pitkin County): year-round
Denver/Aurora (Denver, Adams, Arapahoe, and Jefferson Counties): October 1 – October 31 and April 1 – September 30
Silverthorne/Breckenridge (Summit County): December 1 – March 31
Steamboat Springs (Routt County): December 1 – March 31
Telluride (San Miguel County): year-round
Vail (Eagle County): year-round

Delaware

Lewes (Sussex County): June 1 – August 31

District of Columbia

Washington, D.C. (includes the cities of Alexandria, Falls Church, and Fairfax, and Arlington and Fairfax Counties in Virginia, plus Montgomery and Prince George’s Counties in Maryland): year-round

Florida

Boca Raton/Delray Beach/Jupiter (Palm Beach and Hendry Counties): January 1 – April 30
Bradenton (Manatee County): February 1 – March 31
Cocoa Beach (Brevard County): February 1 – March 31
Fort Lauderdale (Broward County): January 1 – April 30
Fort Myers (Lee County): January 1 – March 31
Fort Walton Beach/DeFuniak Springs (Okaloosa and Walton Counties): June 1 – July 31
Gulf Breeze (Santa Rosa County): June 1 – July 31
Key West (Monroe County): year-round
Miami (Miami-Dade County): December 1 – May 31
Naples (Collier County): December 1 – April 30
Panama City (Bay County): June 1 – July 31
Sarasota (Sarasota County): February 1 – April 30
Sebring (Highlands County): February 1 – March 31
Stuart (Martin County): February 1 – March 31
Tampa/St. Petersburg (Pinellas and Hillsborough Counties): February 1 – April 30
Vero Beach (Indian River County): December 1 – April 30

Georgia

Atlanta (Fulton and DeKalb Counties): January 1 – March 31

Additional States on the List

The complete list in Notice 2025-54 continues through roughly 50 more localities across Idaho, Illinois, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming. Major year-round entries include New York City and Boston.¹ Consult the Notice directly for the exact county definitions and date ranges for every locality.

How the Seasonal Windows Work

Peak-season patterns drive most of the seasonal entries. Florida beach markets carry the designation in winter and spring, Colorado ski towns qualify from December through March, and Gulf Coast destinations qualify during the summer. Travel to any of these places outside the listed dates reverts to the $225 standard rate.

A handful of entries have split seasons that skip months entirely. Sedona is high-cost from October through December and again from March through September, but drops to standard in January and February. Denver qualifies in October and again from April through September, but falls off from November through March. Applying the $319 rate on the wrong side of one of these gaps either overpays the employee (creating taxable income for the excess) or underpays them.

County Lines vs. City Limits

Each locality is defined by either a county or a city’s legal boundaries, and the distinction matters. When the list names a county, the $319 rate applies everywhere inside that county. When it names a city, the rate applies only inside the city limits.

Los Angeles illustrates the granularity. The entry covers Los Angeles, Orange, and Ventura Counties and Edwards AFB, but explicitly carves out the city of Santa Monica, which has its own separate year-round listing.¹ Sedona’s designation applies only inside city limits, not the surrounding Yavapai County; a hotel two miles outside the city line falls under the standard rate.

What the $319 Rate Covers

The $319 high-cost rate breaks down into $233 for lodging and $86 for meals and incidental expenses (M&IE). The $225 standard rate breaks down into $151 for lodging and $74 for M&IE.¹ Employers who prefer to reimburse actual lodging costs from receipts can pay the M&IE-only figures instead: $86 for high-cost localities and $74 elsewhere. An incidental-expenses-only rate of $5 per day is also available and works for any CONUS or OCONUS location.

First and Last Day Proration

Full daily M&IE applies only to complete travel days. On the first and last day of a trip, employers prorate M&IE to 75 percent of the applicable rate. That works out to $64.50 for a high-cost partial day and $55.50 for a standard partial day. Rev. Proc. 2019-48 also permits any other proration method that is consistently applied and reflects reasonable business practice.² Whichever approach you pick, apply it identically for every employee.

Rules for Using the List

The list is only useful if you’re using the high-low method, which is governed by Revenue Procedure 2019-48.² Two consistency rules constrain how you apply it.

Once an employer uses the high-low method for a particular employee, it must be used for all of that employee’s continental U.S. travel for the rest of the calendar year. You can’t switch that employee to the standard federal per diem tables mid-year to capture a higher figure for one trip.²

A separate transition rule covers the October rate change. Because the IRS updates the list and rates every October 1, the last quarter of the calendar year overlaps two per diem periods. If you used the high-low method from January through September, you must continue with it in October through December. Within that final quarter, you may apply either the old rates or the new rates, but the choice has to be consistent across every employee reimbursed under high-low.²

Who Can’t Use the List

Self-employed individuals cannot use the high-low method at all. They are limited to the standard federal per diem rates or the M&IE-only deduction method when substantiating their own travel.²

Related parties are also excluded. If the employer and employee are related within the meaning of IRC Section 267(b), the high-low rates cannot be used. For ownership, the threshold is 10 percent: an employee who owns 10 percent or more of the business is treated as related and cannot receive high-low per diem reimbursements.³

Reimbursements Must Run Through an Accountable Plan

Per diem payments stay tax-free only under an accountable plan, which requires three things: a business connection for the travel, adequate substantiation, and return of any amounts exceeding substantiated costs.⁴ Miss any element and every dollar becomes taxable wages subject to income tax withholding and employment taxes. Paying more than $319 or $225 is permitted, but the excess is taxable compensation reportable on Form W-2.⁵

Where the List Doesn’t Apply

The high-cost list only covers travel within the 48 contiguous states and the District of Columbia. It cannot be used for Alaska, Hawaii, or any foreign destination.⁶ Alaska, Hawaii, and U.S. territory rates are set by the Department of Defense; foreign rates come from the State Department. An employer using high-low for CONUS travel can still use a different permissible method for the same employee’s trips outside the continental U.S.²

Transportation-industry workers subject to Department of Transportation hours-of-service rules also sit outside the list. Their special M&IE rate is $80 per day for any CONUS location, regardless of whether the destination appears on the high-cost list.¹

1
Internal Revenue Service. Notice 2025-54: 2025-2026 Special Per Diem Rates
2
Internal Revenue Service. Revenue Procedure 2019-48
3
Internal Revenue Service. Revenue Procedure 2007-63
4
Internal Revenue Service. Revenue Procedure 2011-47
5
Internal Revenue Service. Per Diem Payments Frequently Asked Questions
6
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses