A United States federal court struck down a Trump administration policy imposing a $100,000 supplemental fee on new H-1B visa petitions. The Court held that the measure amounted to an unauthorized tax, violating separation of powers principles and the Administrative Procedure Act.
In a significant ruling with far-reaching implications for immigration policy, executive authority, and the technology sector, a federal court in the United States has invalidated a Trump administration measure that sought to impose a $100,000 supplemental fee on new H-1B visa petition.
Judge Leo T. Sorokin of the United States District Court for the District of Massachusetts struck down the policy, holding that the fee amounted to an unauthorized tax that exceeded the powers granted to the President under federal immigration law. The Court concluded that the measure violated both constitutional principles governing the separation of powers and the requirements of the Administrative Procedure Act (APA).
The decision came in a challenge brought by twenty States that argued the policy would severely impair their ability to recruit skilled foreign professionals in critical sectors such as healthcare, higher education, scientific research, and public administration.
Background: The H-1B Visa Programme
The H-1B visa programme is one of the most widely used employment-based immigration pathways in the United States. It allows American employers to hire foreign professionals in specialized occupations that require advanced knowledge and technical expertise.
Industries such as information technology, engineering, healthcare, biotechnology, finance, and academic research have long relied on the programme to fill workforce shortages. Universities, research institutions, hospitals, and public agencies also utilize H-1B visas to recruit highly qualified professionals from around the world.
Historically, employers sponsoring H-1B workers have been required to pay filing fees and related administrative charges prescribed by Congress. Prior to the challenged policy, these fees generally ranged between $960 and $7,595 depending on the nature of the employer and the petition.
The Controversial Proclamation
The litigation centered on Proclamation 10973, signed by President Donald Trump on September 19, 2025. The proclamation introduced a requirement that employers filing new H-1B petitions pay an additional $100,000 supplemental charge. The administration justified the measure as a tool to combat perceived abuse of the H-1B programme and to safeguard employment opportunities for American workers.
To support the policy, the administration relied upon provisions of the Immigration and Nationality Act (INA) that authorize the President to restrict or regulate the entry of non-citizens when their admission is considered detrimental to the interests of the United States. According to the government, the fee would discourage excessive reliance on foreign labor and encourage employers to prioritize domestic recruitment.
The proposal immediately triggered widespread concern among employers, educational institutions, and immigration experts. Critics argued that a fee of $100,000 per petition would dramatically increase the cost of hiring foreign professionals and effectively make the H-1B route inaccessible for many organizations.
While large multinational corporations might possess the financial resources to absorb such costs, smaller businesses, startups, universities, hospitals, and non-profit research institutions would face significant challenges.
Industry groups warned that the measure could lead to shortages of skilled workers in sectors already experiencing recruitment difficulties. They further cautioned that the policy would undermine America’s competitiveness in attracting global talent and create uncertainty for both employers and prospective foreign employees.
Twenty States filed suit challenging the proclamation. The States contended that the policy would directly affect public institutions that depend on highly skilled foreign workers. Public universities, teaching hospitals, medical centers, and research facilities frequently employ professionals through the H-1B programme, and the States argued that the unprecedented fee would make such hiring financially impractical.
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The plaintiffs also questioned whether the President possessed the legal authority to impose what was, in substance, a massive financial levy without congressional approval.
ISSUE:
- Whether the $100,000 payment constituted a legitimate immigration restriction or whether it was effectively a tax imposed without statutory authorization?
- Whether Congress had delegated taxing authority to the President through the Immigration and Nationality Act?
Analysis of the Court
Nature of the Fee: Judge Sorokin concluded that the payment was, in reality, a tax. The Court emphasized that employers seeking H-1B workers were engaging in a lawful activity expressly permitted by federal law. Since the fee was not attached to any unlawful conduct, it could not be characterized as a penalty or enforcement mechanism.
The Court observed:
“Here, the substance and application of the $100,000 payment reveal that it is a tax, regardless of what the payment is called.”
The judgment stressed that courts must look beyond labels and examine the practical operation of a government measure when determining its legal character.
No Congressional Delegation of Taxing Authority: On the question of delegation of taxing authority to the President through the Immigration and Nationality Act, the Court answered that question in the negative. Examining the statutory provisions relied upon by the administration, Judge Sorokin noted that the Act empowers the President to impose various forms of immigration restrictions under specified circumstances. However, those provisions do not expressly authorize the executive branch to impose taxes.
The Court stated:
“These sections allow the President to impose ‘restrictions,’ ‘rules,’ ‘regulations,’ ‘orders,’ ‘limitations,’ and ‘exceptions’ to the entry of noncitizens to the United States. Like the powers delineated in the IEEPA, none of these terms, by their ordinary meaning, include the power to tax.”
According to the judgment, the constitutional power to levy taxes belongs to Congress, and any delegation of that authority must be expressed clearly and unequivocally. General language concerning immigration regulation could not be interpreted as granting the President authority to impose substantial financial charges equivalent to taxes.
Separation of Powers Concerns: The ruling highlighted broader constitutional principles concerning the separation of powers. The Court observed that permitting the executive branch to impose taxes based on broad statutory language would undermine Congress’s exclusive constitutional role in taxation and public finance. The judgment reaffirmed that significant exercises of taxing power require clear legislative authorization and cannot be inferred from ambiguous provisions.
The Court therefore rejected the administration’s argument that broad immigration powers were sufficient to justify the supplemental fee.
Violation of the Administrative Procedure Act: Apart from the constitutional and statutory issues, the Court also found that federal agencies implementing the proclamation had violated the Administrative Procedure Act. The APA generally requires agencies to follow notice-and-comment procedures before adopting rules that create new legal obligations or significantly alter existing rights and responsibilities.
Judge Sorokin held that the agencies had failed to comply with these procedural safeguards despite the substantial impact the policy would have on employers and institutions across the country.
Policy Found Arbitrary and Capricious: The Court further concluded that the measure was arbitrary and capricious under administrative law standards. According to the judgment, the government failed to adequately evaluate less burdensome alternatives before adopting the sweeping fee requirement.
It also neglected to consider exemptions for cap-exempt employers, including universities and certain research institutions, and did not sufficiently account for the reliance interests of organizations that had structured their recruitment and staffing decisions around the existing H-1B framework. These shortcomings, the Court held, rendered the policy legally unsustainable.
Policy Vacated in Its Entirety: Having found multiple legal defects in the proclamation, the Court set aside the policy in its entirety. Although the plaintiff States sought broader relief, including a permanent injunction, the Court determined that vacatur of the policy provided complete relief. Since the proclamation itself had been invalidated and could no longer be enforced, the Court concluded that an additional injunction was unnecessary.
Significance of the Ruling
The decision represents a major setback for efforts to reshape immigration policy through executive action alone. It reinforces the constitutional principle that taxation remains primarily a legislative function and highlights the limits of presidential authority under immigration statutes.
The ruling is also likely to be welcomed by technology companies, universities, healthcare institutions, research organizations, and state governments that depend heavily on skilled foreign professionals. By striking down the $100,000 supplemental charge, the Court has preserved the existing H-1B fee structure and removed a significant barrier that critics argued would have dramatically restricted access to global talent.
At the same time, the judgment serves as an important reminder that even in areas where the executive branch enjoys substantial discretion, major policy changes must remain consistent with statutory authority, constitutional limitations, and procedural safeguards established by administrative law.
Case Title: State of California v. Mark Wayne Mullin et al.
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