A federal judge in Massachusetts has blocked the Trump administration’s $100,000 H-1B fee. While the case is important for employers, universities, hospitals, and foreign workers, it is also significant for another reason: It is the latest reminder that tax is becoming one of the courts’ favorite ways to talk about power.
About the H-1B Program
The H-1B program allows U.S. employers to sponsor foreign workers for temporary employment in “specialty occupations.” These typically require highly specialized knowledge and at least a bachelor’s degree or equivalent. We tend to associate H-1B visas with technology jobs, but the program also includes jobs in medicine, education, engineering, science, and other specialized fields. The program has limits, including an annual cap for most private employers, while exempting some colleges, nonprofits, and government research organizations.
Before the payment hike, H-1B visa costs ranged from $960 to $7,595, depending on the employer and petition type. The jump to $100,000 was framed as an immigration restriction aimed at curbing abuse and protecting American workers.
The $100,000 Ruling
On June 8, Judge Leo T. Sorokin of the U.S. District Court for the District of Massachusetts issued a memorandum and order in State of California et al. v. Markwayne Mullin et al., siding with 20 states that challenged the fee bump. The court granted the states’ motion for summary judgment, denied the government’s cross-motion, and vacated the policy in its entirety.
Summary judgment is a court’s judgment entered for one party and against another. In a civil case, it’s triggered by a pretrial motion seeking a ruling on the merits. Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is proper when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law.
A cross-motion is a formal request made in response to a motion already filed by the opposing party. It asks the judge to deny the original request and often asks the court to rule in their favor instead, which is what happened here. The government asked, in the alternative, that the complaint be dismissed.
But this is not simply about H-1B visas. The bigger story is how courts are increasingly using tax law to define the boundaries between Congress and the executive branch. That matters because this case is likely not over. An appeal seems likely—perhaps even to the Supreme Court. The fight may turn on a familiar question: When is a payment really a tax?
The Tax Question
That question should sound familiar. It was at the center of the Supreme Court’s 2012 decision in NFIB v. Sebelius, the Affordable Care Act (ACA) case. There, the Court considered whether Congress could require individuals to obtain health insurance or make a “shared responsibility payment” to the IRS. Chief Justice Roberts famously concluded that while the mandate could not be sustained under the Commerce Clause, the payment could be sustained as a tax. That was the move that saved the ACA.
At the time, I wrote about the strangeness of that result. Congress had not exactly sold the ACA as a tax law. The law itself used the language of mandate and penalty. But Roberts looked beyond the label and focused on the substance. The payment was collected by the IRS. It was not so punitive that individuals had no real choice but to buy insurance. And failing to buy health insurance did not carry negative legal consequences beyond making the payment. In that context, Roberts concluded, the payment could reasonably be characterized as a tax.
That same lesson now comes back in the H-1B case, only this time it cuts against the administration. Judge Sorokin leaned on NFIB to conclude that the $100,000 H-1B payment is a tax, not a penalty. Hiring an H-1B worker remains lawful. The payment is not a punishment for an unlawful act. Instead, it is a large government exaction attached to participation in a lawful statutory program.
In the ACA case, calling the payment a tax helped the government because Congress imposed it and has the power to tax under the Constitution. In the H-1B case, calling the payment a tax harms the government because the President imposed it and lacks independent taxing power. That separation-of-powers concern was also central to the recent tariff decision.
The President’s Immigration Power Has Limits
The Immigration and Nationality Act gives the President broad authority to restrict the entry of noncitizens when he finds that their entry would be detrimental to the interests of the United States. Section 212(f), in particular, has been read broadly by courts, including the Supreme Court in the travel ban litigation. The administration argued that the $100,000 payment was part of a permissible entry restriction, not a tax.
Judge Sorokin accepted that the President has broad immigration authority. He did not say that the President cannot restrict entry. Instead, he drew a line between regulating entry and imposing a tax. The INA gives the President power to impose restrictions, limitations, and exceptions. What it does not do, at least in the court’s view, is clearly delegate Congress’s taxing power.
The Post-Loper Bright Backdrop
After the Supreme Court decision in Loper Bright, courts no longer defer to an agency’s interpretation of ambiguous statutory authority under Chevron. Courts must now exercise their own independent judgment about what a statute means. That is especially important in cases where an agency or the President claims broad power based on broad statutory language.
The authority to impose taxes is one of Congress’s core constitutional powers. And the executive branch, which includes the IRS, can collect taxes authorized by statute. But courts are increasingly skeptical of claims that Congress has handed over that authority through vague statutory language.
We saw this in Learning Resources, the tariff case. There, the Supreme Court rejected the Trump Administration’s reliance on the International Emergency Economic Powers Act (IEEPA) as authority for broad tariffs. Tariffs are taxes on imports, and Congress has constitutional authority over them. That was the lesson of Learning Resources. It’s also the lesson here.
Why The Court Vacated The Policy
A modest administrative fee tied to the cost of processing an application is one thing. The INA already permits certain adjudication fees to be charged to recover the costs of providing immigration services. But the government conceded that the $100,000 payment was not a cost-recovery fee. It was not intended to cover the cost of adjudicating H-1B petitions. It was a large payment requirement designed to reshape behavior. That made it look less like an administrative fee and more like a tax.
The court also found problems under the Administrative Procedure Act. The agencies implemented the policy through memoranda, FAQs, website updates, and other materials without notice-and-comment rulemaking. Judge Sorokin concluded that those materials imposed legal obligations and therefore functioned as legislative rules.
Once the court decided that the $100,000 payment was an unauthorized tax, the APA analysis became much easier. The agencies could not lawfully implement a directive that exceeded the President’s authority.
That also explains the remedy. The court vacated the policy in its entirety and declined to issue a separate permanent injunction. (A permanent injunction is a court order requiring a party to do or refrain from doing something.)
In this case, the states sought a permanent injunction as a backup remedy, asking the federal government not to enforce the H-1B payment policy. But the court said that was unnecessary because it had already vacated the policy. In other words, once the court set the policy aside, there was no need for a separate order prohibiting the government from enforcing it. On appeal, expect the government to challenge not only the merits but also the scope of relief.
What Happens Next
An appeal is expected. The administration is likely to argue that the court overread the tax cases and to characterize the payment as a condition of entry rather than a tax.
The states, by contrast, argue that Congress built the H-1B program, including setting caps, exemptions, and fees. Congress gave agencies authority to impose cost-based adjudication fees. But the states claim that Congress did not authorize the President to impose a $100,000 tax on H-1B petitions by proclamation.
If the case reaches the Supreme Court, the justices are not expected to choose whether the President has immigration authority. The more precise question is whether a broad power to restrict entry includes a power to impose a massive payment. That is a tax question.
Tax Touches Everything
In 2012, the Court told us that a payment can be treated as a tax based on what it does, not simply what Congress calls it. In 2026, that same principle may constrain the executive branch. If the government imposes a payment and it walks and quacks like a tax, courts may treat it as a tax. Once they do, the next question is who had the constitutional authority to impose it?
Tax law geeks like me have been saying for years that tax touches everything. The courts appear to agree.
