Here is why US Court struck down President Donald Trump’s $100,000 H-1B visa fee

A United States federal court on Monday struck down President Donald Trump administration’s $100,000 fee on new H-1B visa petitions [State of California Vs Mark Wayne Mullin Et Al].

Judge Leo T Sorokin of the United States District Court for the District of Massachusetts held that the policy violated the separation of powers and the Administrative Procedure Act and the President cannot use immigration powers to impose what is effectively a tax.

The case concerned Proclamation 10973, signed by President Donald Trump on September 19, 2025. The proclamation required employers filing new H-1B petitions to make a supplemental payment of $100,000.

The administration said the measure was needed to prevent misuse of the H-1B programme and protect American workers. It relied on provisions of the Immigration and Nationality Act that allow the President to restrict entry of non-citizens if their entry is found to be detrimental to US interests.

The fee would have made the H-1B route prohibitively expensive for many employers, especially startups, universities, hospitals and smaller businesses that rely on skilled foreign workers but without the financial capacity of large technology companies.

Immigration experts and industry groups had warned that such a steep charge could discourage employers from sponsoring foreign talent, reduce the availability of skilled workers in sectors such as technology, healthcare and research, and create uncertainty for existing and prospective H-1B applicants.

Twenty States challenged the policy. They argued that the payment requirement would affect their ability to hire foreign workers in critical sectors including education, healthcare and public universities.

The Court noted that before the proclamation, H-1B petition fees ranged between $960 and $7,595. The new policy, therefore, sharply increased the cost of filing such petitions.

The main question before the Court was whether the $100,000 payment was a valid immigration restriction or an unauthorised tax.

The Court held that it was a tax. It reasoned that hiring H-1B workers was lawful and the payment was not a punishment for any illegal act. Therefore, it could not be treated as a penalty.

“Here, the substance and application of the $100,000 payment reveal that it is a tax, regardless of what the payment is called.”

The Court then examined whether Congress had delegated taxing power to the President under the Immigration and Nationality Act. It held that it had not.

"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," the Court held.

It ruled that the Act allows the President to impose restrictions, rules, regulations, orders, limitations and exceptions on the entry of non-citizens. However, none of these terms included the power to tax.

The Court also rejected the government’s argument that broad immigration powers were enough to support the fee. It said Congress must clearly delegate taxing power to the executive branch and ambiguous language was not enough.

The Court further held that the agencies implementing the proclamation had violated the Administrative Procedure Act. It found that the policy created new legal obligations but was issued without notice-and-comment rule making.

The Court also found the policy arbitrary and capricious. It said the government had not properly considered alternatives, exemptions for cap-exempt employers or the reliance interests of affected institutions.

The policy was, therefore, set aside in its entirety. However, the Court declined to issue a separate permanent injunction, holding that vacating the policy gave the States complete relief.

[Read Judgment]