Opinion: Trump renewed the $100,000 H-1B fee a court already called an unlawful tax

On September 18, President Trump signed a proclamation extending, for another year, a $100,000 fee on new H-1B visa petitions. The extension runs through September 21, 2027. It arrived ten weeks after a federal judge had already ruled that the fee was not really a fee at all but an unauthorized tax, and vacated it entirely. The government is currently barred from collecting the money — a federal appeals court declined in July to let it start again while the case is appealed — which means the administration has now renewed, for a second year, a policy that a court has found it has no legal authority to impose in the first place.

That sequence is worth sitting with, apart from any view of what the H-1B program should look like. Whatever the fee's merits, an executive branch that keeps re-issuing a policy after a court has vacated it, rather than asking Congress to write it into law, is treating a legal defeat as an inconvenience to route around rather than a boundary to respect. And it is doing so at the direct expense of hospitals, universities and employers who now have to plan a year of hiring against rules that change with whichever court order happens to be in force that week.

What the fee does, and who it lands on

The $100,000 charge applies to new H-1B petitions filed for workers not already in the United States — new hires coming from abroad, largely, rather than the renewals or in-country status changes that make up most H-1B activity. USCIS caps new H-1B approvals at 85,000 a year, but the program supports several hundred thousand workers currently employed under the visa once renewals and transfers are counted, and it is the smaller pool of new overseas hires — the ones this fee targets — that hospitals, research labs and universities most often use to fill positions they say they cannot staff domestically. That narrower scope still reaches real people with real jobs to fill: the coalition that first sued over the fee included teaching hospitals recruiting foreign-trained nurses, universities hiring international faculty, and religious and nonprofit organizations that rely on specialized workers for understaffed rural communities.

A White House fact sheet accompanying the September proclamation makes the administration's case for why that reach is justified: it says H-1B registrations from major IT outsourcing firms have fallen 92 percent since the original 2025 proclamation, and cites 6.1 percent unemployment among recent computer science graduates as evidence that the program has been displacing, not supplementing, American workers. The fact sheet also notes that the share of the domestic IT workforce holding H-1B status rose from roughly 32 percent in 2003 to more than 65 percent just before the fee took effect. Those are the numbers the administration wants read alongside the fee's renewal, and they describe a genuine problem — concentrated H-1B use in a handful of outsourcing-heavy firms and job categories — worth taking seriously, whatever one concludes about the remedy.

A fee a federal court already called an unlawful tax

The remedy's legal troubles began almost as soon as the original fee took effect in September 2025. A coalition of twenty states, led by Massachusetts Attorney General Andrea Joy Campbell, sued in federal court in Boston, arguing the fee amounted to an immigration tax that only Congress could impose. On June 8 this year, U.S. District Judge Leo Sorokin ruled for the states, vacating the fee outright and rejecting the government's argument that a president's power to restrict entry at the border extends to pricing that entry at six figures.

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

Sorokin's reasoning tracked ground the Supreme Court itself had covered only months earlier, when it struck down a separate set of Trump-era tariffs for exceeding presidential authority under emergency-powers law. In both cases, the argument was the same: only Congress can impose a charge of this size and character on private economic activity, and a president cannot manufacture that authority out of a statute — in this case, immigration law — that was never written to grant it. The administration appealed, and asked the 1st U.S. Circuit Court of Appeals to let it keep collecting the fee while the appeal played out. The appeals court refused, finding on July 24 that the government had not shown it was likely to win. As of the September 18 renewal, that is still where things stand: the fee is written into a proclamation that now runs through 2027, and a court order says the government cannot collect it.

The administration's stronger argument

It would be unfair to treat the renewal as simply lawless. The legal picture is genuinely more contested than a single vacated fee suggests. A separate suit brought by the U.S. Chamber of Commerce initially lost at the district court level in a different jurisdiction, with a judge there upholding the fee before the Chamber appealed; that case remains pending. Two federal judges, in other words, have not agreed with each other on this question, and an appellate ruling one way or the other could still vindicate the administration's position. Renewing the proclamation before its first year lapsed also avoids a technical problem: if the government eventually wins on appeal, having let the underlying authority expire in the meantime would mean starting from scratch with a brand-new proclamation and a fresh round of litigation over its validity. Keeping the clock running, on this view, is less an act of defiance than routine housekeeping meant to preserve the administration's options while the courts sort out a genuinely unresolved question.

That argument has real force as a description of legal strategy. It has much less force as a description of what employers are supposed to do with it. A hospital deciding today whether to sponsor a nurse trained overseas, or a university trying to close on a faculty hire for next fall, cannot wait for the 1st Circuit's eventual ruling or a Supreme Court cert decision that may be a year or more away. It has to decide now whether an extra $100,000 might attach to that hire at some point during a multi-year visa process, based on a fee that is simultaneously vacated by one court, upheld in a separate proceeding by another, and renewed by the White House as though neither ruling had happened. The formal notice implementing the fee reads like settled regulation. The litigation underneath it is anything but.

What should follow

The cleanest way out of this loop is the one the administration has avoided for a year: legislation. If Congress believes a $100,000 charge on certain H-1B hires is a sound way to curb wage suppression and outsourcing abuse — and the administration's own data on outsourcing-firm registrations makes a case that some intervention is warranted — it can write that fee into the Immigration and Nationality Act, where Sorokin's ruling says the authority to impose it actually resides. That would let courts evaluate the policy on its economic merits rather than on the separation-of-powers question that has dominated every ruling so far, and it would give hospitals and employers a rule stable enough to plan around. Instead, the administration has chosen to keep the fee alive by proclamation, betting that a friendlier appellate panel or a change in circumstance will eventually let it collect what two lower courts have now split on. That bet may or may not pay off. In the meantime, it is employers and the workers they are trying to hire who are absorbing the cost of the uncertainty, one renewed proclamation at a time.