Federal Judge Strikes Down Trump H-1B $100,000 Fee as Unauthorized Tax, While Accepting President's Broad Entry-Restriction Authority

Judge Leo T. S. District Court for the District of Massachusetts vacated the Trump administration’s $100,000 H-1B fee policy on June 8, 2026. The court granted summary judgment to 20 states that challenged the fee and denied the government’s cross-motion.

The ruling came in State of California et al. v. Markwayne Mullin et al. Judge Sorokin concluded that the $100,000 payment functions as a tax rather than a penalty or cost-recovery fee. The government had conceded the payment was not intended to cover adjudication costs.

Before the increase, H-1B visa costs ranged from $960 to $7,595 depending on employer and petition type. S. employers to sponsor foreign workers for temporary employment in specialty occupations that typically require at least a bachelor’s degree.

The court found the agencies implemented the policy through memoranda, FAQs, and website updates without notice-and-comment rulemaking. Judge Sorokin determined those materials imposed legal obligations and therefore operated as legislative rules. The administration had framed the $100,000 payment as an immigration restriction under Section 212(f) of the Immigration and Nationality Act aimed at curbing abuse and protecting American workers.

Judge Sorokin accepted the President’s broad authority to restrict entry but held that authority does not extend to imposing a tax. The decision drew on the Supreme Court’s 2012 ruling in NFIB v. Sebelius, in which Chief Justice Roberts sustained the Affordable Care Act’s shared responsibility payment as a tax.

Judge Sorokin applied the same functional analysis and concluded the H-1B payment is a tax because hiring an H-1B worker remains lawful and the payment is not punitive. The court declined to issue a separate permanent injunction, stating that vacating the policy made further injunctive relief unnecessary. The states had sought a permanent injunction as a backup remedy.

The ruling follows the Supreme Court’s Loper Bright decision, which ended Chevron deference and requires courts to exercise independent judgment over statutory interpretation. It also follows the Court’s Learning Resources decision rejecting the administration’s use of the International Emergency Economic Powers Act for broad tariffs. An appeal is expected.

The administration is anticipated to argue that the payment constitutes a condition of entry rather than a tax, while the states maintain that Congress alone authorized cost-based adjudication fees for the H-1B program.