Federal judge voids Trump's $100,000 H-1B visa fee as unlawful tax

President Trump signed a presidential proclamation on September 19, 2025, imposing a $100,000 fee on employers petitioning for new H-1B workers from abroad. The fee took effect at 12:01 a.m. on September 21, 2025. It applied only to new petitions, not renewals or change-of-status filings for workers already in the U.S., but it covered any employer seeking to bring in a new high-skilled foreign worker.

Before the proclamation, employers paid a range of mandatory USCIS fees per new H-1B petition. A qualifying nonprofit paid as little as $960; a large employer using optional premium processing paid up to roughly $6,300. The new $100,000 charge came on top of those base costs, effectively making it prohibitive for public institutions and smaller employers.

The fee's constitutional problem is simple: the Taxing Clause gives Congress, not the president, the power to raise revenue. Judge Sorokin's June 8 ruling turned on this distinction — a $100,000 charge designed to collect money is a tax regardless of what immigration statute the executive invokes to justify it.

A coalition of 20 state attorneys general filed suit in U.S. District Court in Boston in December 2025. The states, including California, Illinois, Massachusetts, Washington, and 16 others, argued the fee violated the Immigration and Nationality Act and the Administrative Procedure ActAdministrative Procedure Act1946 law governing how federal agencies develop regulations and make decisions through rulemaking and adjudication.Key ConceptAdministrative Procedure Act1946 law governing how federal agencies develop regulations and make decisions through rulemaking and adjudication.Open conceptBookmark. The APA requires agencies to publish proposed rules, accept public comment, and respond to objections before enforcement. The administration skipped that process entirely, issuing the $100,000 charge through a proclamation with no public input period.

Massachusetts AG Andrea Joy Campbell co-led the filing, announcing the suit by arguing the fee functioned as an unauthorized tax and would devastate state institutions that depend on H-1B workers to fill positions in teaching, medicine, and research.

On June 8, 2026, U.S. District Judge Leo Sorokin, appointed by President Obama in 2014 and confirmed 91-to-0 by the Senate, issued a 42-page ruling vacating the policy nationwide. Sorokin found that "the substance and application of the $100,000 payment reveal that it is a tax," and that Congress had not delegated the power to impose such a tax to the president. He wrote: "The Policy implementing the Proclamation is declared unlawful and is VACATED in its entirety."

Sorokin also found the agencies violated the APA by failing to undergo notice-and-comment rulemakingNotice-and-Comment RulemakingAPA process requiring agencies to publish proposed rules and accept public comments before finalizing.Key ConceptNotice-and-Comment RulemakingAPA process requiring agencies to publish proposed rules and accept public comments before finalizing.Open conceptBookmark. He rejected the government's request to limit the ruling to the 20 states in the lawsuit, instead making it nationwide in scope. The ruling effectively suspended the fee for all employers across the country.

The administration argued the fee was authorized by Section 212(f) of the Immigration and Nationality Act, which gives the president broad authority to restrict or condition entry of noncitizens when he finds their entry detrimental to U.S. interests. U.S. District Judge Beryl Howell in Washington, D.C., accepted that argument in December 2025, ruling in a separate lawsuit brought by the U.S. Chamber of Commerce and the Association of American Universities that Trump had adequate authority under INA 212(f).

Sorokin reached the opposite conclusion: even if the president has broad authority to restrict entry, imposing a $100,000 revenue-raising charge goes beyond restriction and into taxation, a power the Constitution places exclusively in Congress. The two rulings create a direct circuit split between the First Circuit (Boston) and the D.C. Circuit, with a third case pending in the Ninth Circuit (San Francisco).

The American Hospital Association surveyed over 1,000 health systems in November 2025, and the results captured the policy's stakes. 64% of hospitals that used or planned to use the H-1B program said they'd pause, defer, or limit recruitment because of the fee. Of the positions that would have been filled by H-1B workers, 57% were direct-care clinical roles. More than 70% of respondents said the fee would directly affect patient care.

One-quarter of U.S. physicians are international medical graduates, according to the American Medical Association. A 2025 JAMA study found that rural counties, high-poverty counties, and counties with existing workforce shortages had the highest concentrations of H-1B-sponsored healthcare professionals, the communities with the fewest alternatives if those workers can't be recruited.

Public schools face a parallel staffing problem. The National Education Association documented that over 2,300 educators across 500-plus school districts hold H-1B visas. Texas, North Carolina, and California districts employ the most, but remote districts, like the Bering Strait School District in Alaska with 35 approvals, depend on H-1B workers to fill science, math, and special education positions that can't be filled with domestic candidates.

The states argued in their lawsuit that the $100,000 fee would force districts to either pay a prohibitive charge or leave critical positions unfilled, worsening existing teacher shortages in high-need subjects. School districts, unlike large tech employers, generally can't absorb a six-figure fee per hire.

The fee's origins are partly political. When Trump signed the September 2025 proclamation, it came amid an ongoing internal MAGA debate about H-1B visas. Elon Musk had pledged to go "to war" for the program after critics in Trump's base attacked it as a mechanism for replacing American workers. The administration framed the proclamation partly as a compromise: preserving the H-1B program in form while dramatically restricting access through cost.

The fee applied only to workers being brought from abroad, not to domestic status changes from student visas or other categories. That meant a company already employing an F-1 visa holder could still convert them to H-1B without the $100,000 charge, but a hospital recruiting a physician from India would face the full fee.

White House spokesperson Taylor Rogers said after Monday's ruling that the administration "is confident this order will be reversed on appeal." The Trump administration plans to appeal to the First Circuit. The Chamber of Commerce has separately appealed Howell's summary-judgment denial in the D.C. Circuit, and the San Francisco case adds a potential Ninth Circuit ruling.

Legal analysts note that three circuits issuing conflicting rulings would create conditions likely to prompt Supreme Court review. The justices have previously upheld broad presidential immigration authority under INA 212(f), but have not directly addressed whether the taxing-power limits in the Constitution constrain how that authority can be exercised.

For employers, Monday's ruling means the $100,000 fee is currently suspended nationwide. USCIS has not yet issued formal guidance on whether pending petitions will be processed without the fee, but immigration attorneys advised clients that new petitions filed after the ruling should not include the charge. The relief may be temporary: if the First Circuit stays the ruling pending appeal, the fee could be reinstated while the case works through the courts.