New H-1B Visa Decision: Federal Judge Strikes Down Trump’s $100,000 Fee

A federal court has blocked the $100,000 H-1B visa fee, ruling it was an unlawful tax and removing a major cost driver from workforce planning assumptions, at least for now.

The ruling by U.S. District Judge Leo Sorokin in Boston vacates the fee imposed on new H-1B visa petitions.

Background: The $100,000 Fee and Its Impact on H-1B Filings

On Sept. 19, 2025, Trump signed a presidential proclamation adding a $100,000 fee on top of existing H-1B application costs, which had typically run between $2,000 and $5,000. The administration framed the fee as a way to discourage employers from hiring foreign workers and push them toward hiring Americans instead. Sponsoring employers would bear the cost.

The fee had a substantial chilling effect on filings. By February 2026, U.S. Citizenship and Immigration Services (USCIS) had received just 85 payments under the new fee structure – a stark drop from the thousands of petitions the program normally generates.

The H-1B Visa Fee Was a Tax, Court Finds

Twenty Democratic state attorneys general filed suit challenging the fee. Judge Sorokin agreed with the states that the Trump administration exceeded its authority.

The core legal question was whether the $100,000 charge was a regulatory penalty (which a president has broader authority to impose) or a tax (which only Congress can levy). Sorokin concluded it was a tax. 

He leaned on the Supreme Court’s 2012 ruling in National Federation of Independent Business v. Sebelius, which upheld the Affordable Care Act’s individual mandate by classifying it as a tax rather than a penalty. Applying the Sebelius framework, Sorokin found the fee is not punishment for an unlawful act, which makes it a tax. The Immigration and Nationality Act (INA) gives the president broad authority to restrict entry of noncitizens, but the court found those provisions do not clearly give the executive branch taxing power.

The Trump administration countered that the court had no authority to review a presidential immigration decision at all, arguing the action was unreviewable under the president’s broad immigration powers. Sorokin rejected that argument.

Why the Legal Picture Is Still Unsettled

Monday’s ruling isn’t the only H-1B fee case working through the courts. A separate legal challenge filed by the U.S. Chamber of Commerce and the Association of American Universities in the U.S. District Court for the District of Columbia went the other way: In December 2025, Judge Beryl Howell sided with the Trump administration, ruling the fee fell within presidential authority. That case is now before the D.C. Circuit, which heard oral arguments in March 2026 and has not yet ruled. 

That means two federal district courts have reached opposite conclusions on the same fee. An appeal of Sorokin’s ruling is expected. If the First Circuit ultimately reaches a different conclusion than the D.C. Circuit, the dispute could develop into a circuit split that increases the likelihood of Supreme Court review. 

Finance Takeaways

“This ruling removes the immediate $100,000 barrier for new H-1B filings, but it does not remove uncertainty,” said attorney Leigh Ganchan, immigration shareholder in Ogletree Deakins’ Houston office. 

“Employers now have an opportunity to reassess cases that were paused or abandoned, while keeping contingency plans in place in case a stay or appeal changes the current landscape,” she added.

For now, the $100,000 fee is vacated, allowing employers to move forward with new H-1B petitions without the additional cost. For organizations that modeled the fee into workforce planning and sponsorship budgets, near-term cost projections may shift. 

“This is a budget relief event, not a final budget certainty event,” Ganchan said.

Because the government is expected to appeal and may seek a stay, finance teams should avoid treating the ruling as the final word on H-1B costs.

For longer-term planning, Ganchan said finance teams may want to model multiple scenarios:

• The fee remains vacated.
• The fee returns temporarily through a stay.
• Continued uncertainty as appeals and related litigation proceed.

Ganchan said companies that reserved funds to cover the fee may need to evaluate whether those reserves should be maintained, reduced, reclassified or released under existing accounting policies. She noted that ongoing litigation could require companies to revisit cost assumptions for affected H-1B filings.

“The right finance response is scenario planning: what happens if the fee is definitively eliminated, what happens if it returns during appeal, and which filings are business-critical either way,” Ganchan said.

California v. Mullin, Civil No. 25-13829-LTS (D. Mass. June 8, 2026).