A federal judge in the state of Massachusetts on Monday (June 8) struck down the annual $100,000 fee requirement that the Trump administration had attached to H-1B visa petitions. The court declared that the requirement was an unconstitutional tax and vacated all agency materials that had given it effect.

Judge Leo T Sorokin ruled in favour of 20 US states that had challenged the policy. He also issued a declaratory judgment that the requirement violated both the Constitution and the Administrative Procedure Act (APA), which governs how federal agencies make and implement rules.

The fee also mattered for Indians hoping to work in the country, with Indians accounting for more than 70% of all H-1B petitions approved each year since 2015.

The H-1B visa allows US employers to hire foreign nationals in specific occupations or roles that require at a minimum a bachelor’s degree and a body of specialised knowledge. Congress has capped approvals at 65,000 per year for most private employers, with an additional 20,000 for holders of advanced degrees. Universities, nonprofit research organisations and government research bodies are exempt from this cap and can file petitions at any time.

Before the $100,000 proclamation, the petition fees ranged from $960 to $ 7,595. Trump signed the proclamation in September 2025, citing concerns that the programme had been used to replace American workers with foreign labour at lower wages, particularly in STEM (Science, Technology, Engineering and Mathematics) fields. The issue also held political resonance for a section of Trump supporters.

The move invoked presidential authority under Sections 212(f) and 215(a) of the Immigration and Nationality Act (INA). Section 212(f) allows the President to suspend or restrict the entry of any class of aliens when he finds their entry “would be detrimental to the interests of the United States.” Section 215(a) allows him to subject alien entry to “such reasonable rules, regulations, and orders, and such limitations and exceptions as the President may prescribe.”

The proclamation stated that the H-1B programme had been “deliberately exploited to replace rather than supplement, American workers with lower paid, lower-skilled labor” and that such practices had “undermined both our economic and national security.” Federal agencies such as the State Department and Customs and Border Protection issued guidance on implementing the requirement.

The plaintiffs comprised 20 states, which argued that the measure would make it significantly more difficult for public institutions to hire teachers, university faculty and healthcare professionals from other countries — occupations that the proclamation did not address directly and that depend on cap-exempt petitions. For example, if a public hospital sought to hire 10 H-1B workers, the requirement could add $1 million in costs before any petition was processed.

Why did the court strike it down?

The administration argued that the fee was a restriction on entry, not a tax, as the overall revenue collected fell after the proclamation took effect. The court disagreed, stating that hiring H-1B workers is lawful conduct and that the payment did not operate as a penalty for unlawful behaviour.

Instead, it generated revenue and therefore functioned as a tax. It said that “purpose and effect are different” and added that “every $100,000 payment made pursuant to the Policy does raise revenue. That is indisputable. No legal authority suggests that a payment requirement qualifies as a tax only if it increases the total revenue generated from that particular tax.”

The US Constitution gives Congress the power to impose and collect taxes. While Congress can delegate that to the executive branch, the court said that it must do so clearly.

The court then examined whether the INA gave the president the authority to impose such “restrictions”, “rules” and “limitations” on the entry of non-citizens. Judge Sorokin held that those provisions did not clearly delegate Congress’s taxing power.

According to the court, broad authority to regulate immigration is not the same as authority to impose taxes. The court cited the Supreme Court’s ruling earlier this year in Learning Resources v Trump in which the court struck down tariffs imposed under a separate statute on the same logic. The court said that Congress would not hand over its core power to the public purse through language as vague as “any restrictions he may deem to be appropriate”.

It also found that the policy violated the APA. It said that the agencies released their implementing memoranda without notice and comment rulemaking, which is generally required under the APA for new legal obligations. It also said that the policy exceeded what the agencies were authorised to do.

Under the INA, agencies can only set adjudication fees at a level that recovers the cost of providing services. The government itself acknowledged that the $100,000 payment was not intended to cover administrative costs.

The court found the policy to be “arbitrary” and “capricious”. It said that the agencies failed to explain the shift from past practice, failed to consider the reliance interests of employers and state institutions, and did not properly assess the impact on sectors such as education and healthcare.

Taylor Rogers, White House spokesperson, said that “President Trump has clear legal authority to restrict entry of any class of aliens he determines is not in America’s best interests, and that is exactly what he did. The administration is confident this order will be reversed on appeal.”