On June 8, Judge Leo Sorokin of the U.S. District Court for Massachusetts^[1] vacated Presidential Proclamation 10973, which had imposed a $100,000 surcharge on new H-1B petitions.^[2] The ruling is analytically interesting less for what it decides and more for how specifically the doctrinal move the Court makes in calling the charge a tax rather than a regulatory fee, and why that judgment has consequences well beyond this case.

The result gives employers immediate relief. However, the more significant question is how far the entry-condition authority under the Immigration and Nationality Act, 1965 (“INA”)^[3] extends when the condition operates, in practice, as a revenue measure? That question is now actively contested across three federal courts with no consistent answer, and it will eventually require resolution at a higher level.

The Proclamation

President Trump issued this order on September 19, 2025, adding a $100,000 charge to H-1B petitions filed from outside the United States. This covers a narrower slice of all H-1B filings than the headlines suggested as most petitions are extensions or transfers for workers already inside the country. Prior to the proclamation, total filing costs ranged from $960 to $7,595, depending on employer size and petition type. The proclamation multiplied costs by a factor of more than thirteen at the high end.

The administration framed the charge as a condition on entry under its INA authority, labelled it a “regulatory payment,” and argued it fell within the broad presidential discretion that Courts have consistently recognised over the admission of foreign nationals. That discretion well-established. The question was whether it has limits and specifically, whether imposing a charge that generates revenue rather than recovering administrative costs falls outside it.

The case was brought by twenty state attorneys general. That is worth noting because the public narrative around H-1B has always been dominated by the tech sector, but the actual institutional dependency on the program runs deeper in healthcare and higher education. Public hospital systems, state universities, and rural healthcare providers depend on the program to fill positions that domestic hiring pipelines consistently cannot. The states' standing was grounded in concrete operational harm.

The Tax Question

The Court's central holding is that the $100,000 charge is a tax, regardless of what the proclamation calls it. This is where the opinion does its most interesting work.

The regulatory fee versus tax distinction is well-established in administrative law. A regulatory fee is calibrated to recover the cost of administering a government service, and hence is compensatory in character. A tax raises general revenue, that is, it is fiscal in character. The constitutional power to levy taxes belongs to Congress under Article I of the US Constitution.^[4]

The Court found no basis for treating the $100,000 figure as compensatory. U.S. Citizenship and Immigration Services (“USCIS”) does not spend $100,000 processing a single H-1B petition. The figure bore no relationship to administrative costs. It was set at a level that generates revenue, and the administration offered no serious argument that it was designed to do anything else. The labelling of it as a “regulatory payment” or “monetary penalty” was insufficient, as Courts do not defer to executive characterisation of legal substance when the substance contradicts the label.

What is notable in this Court's opinion is the directness with which it applies it to an immigration proclamation, an area where Courts have traditionally been reluctant to second-guess executive action. The ruling essentially says: executive deference in immigration does not extend to the taxing power. Those are two different constitutional domains, and conflating them under the banner of entry-condition authority is not a permissible move.

Two further grounds reinforced the conclusion. First, a substantive rule of this kind requires notice-and-comment rulemaking under the U.S. Administrative Procedure Act (“APA”).^[5] An overnight proclamation bypasses that entirely. Interested parties like employers, hospitals, universities, and states had no opportunity to submit comments before the fee came into effect. The APA's rulemaking requirements exist precisely to subject executive action of significant consequence to structured public scrutiny. Bypassing them for a rule that immediately multiplied filing costs by over thirteen is not a close case under the existing doctrine.

Second, and more fundamentally, the Court identified a separation of powers violation. The executive had imposed a financial obligation of significant magnitude on a defined class of private actors without any congressional appropriation or authorisation. That is a legislative function, not an executive one. The INA grants the President broad authority to restrict entry. It does not grant him the power to levy charges that function as taxes on the domestic employers who petition for entry on behalf of foreign workers.

The Tariff Precedent

The Court drew explicitly on the Supreme Court's February 2026 decision striking down Trump's sweeping tariffs. This cross-reference is worth examining carefully.^[6]

In the tariff case, the Court held that the statutory authority invoked by the executive, however broad in its own domain, did not confer the power to unilaterally impose revenue-raising measures. The President's trade authority covers conditions and restrictions on imports. It does not extend to generating fiscal revenue without congressional action. The Court applied the major questions doctrine alongside a direct structural reading of the taxing power.

The Court's move is to map that reasoning onto the immigration context. Presidential authority under the INA covers conditions on entry. It does not extend to raising revenue through those conditions when the charge in question operates fiscally rather than administratively. The domains differ, but the constitutional structure is the same. Revenue generation requires congressional authorisation. When the executive raises money without it, the label attached to the mechanism does not save the action. This is significant because it suggests a principle that travels across statutory domains.

The question is not whether the President has authority under a given statute. The question is whether that authority, however broad, encompasses revenue generation as a subset. The emerging answer from these decisions is: it does not, and cannot, without explicit congressional delegation.

The Conflicting Ruling

On December 23, 2025, Judge Beryl Howell in the U.S. District Court for D.C. reached the opposite conclusion in Chamber of Commerce v. DHS.^[7] The Court treated the $100,000 charge as a permissible condition on entry rather than a revenue measure, reasoning that the INA's broad grant of entry-condition authority encompassed financial obligations imposed on petitioners. The fee was tethered to the act of admission, not to general revenue generation, and that was enough to keep it within the executive's lane. The Chamber of Commerce has appealed, and the fee remains in effect in that proceeding at least until the proclamation expires by its own terms in September 2026. A third suit, filed in San Francisco by religious groups and labour organisations, could produce a third judicial outcome before either appeal is resolved.^[8]

If the First Circuit affirms the U.S. District Court for Massachusetts' decision and the D.C. Circuit affirms U.S. District Court for D.C.'s decision, the Supreme Court will almost certainly need to intervene. The question presented would be: Does INA Section 212(f)^[9] authority permit the executive to impose charges that function as revenue measures without congressional authorisation? The February 2026 tariff decision provides a framework, but it arose in a trade law context. Applying it directly to immigration entry-condition authority requires the Court to say something it has not yet said explicitly.

Immediate Practical Effect

The Massachusetts ruling has nationwide effect as of June 8. USCIS cannot collect the $100,000 fee under this order. Employers filing new H-1B petitions for workers outside the United States can do so at pre-proclamation fee levels based on existing statutory filing requirements.

The ruling does not address refunds. Employers who paid the $100,000 surcharge between September 2025 and June 8, 2026 have no resolution from this decision. That requires either further litigation, likely a separate suit or a motion in the existing case, or agency guidance, neither of which appears forthcoming in the near term. Employers who paid should document their payments carefully and monitor both the appellate proceedings and any USCIS guidance.

Employers should also plan for reversal. The D.C. ruling points in the opposite direction. The government will almost certainly appeal to the First Circuit, and a stay pending appeal is not impossible, given the conflicting District Court outcomes.

Why the Tax Framing Has Broader Significance

The post-2025 litigation landscape has produced a growing cluster of decisions testing one structural proposition: the executive branch cannot raise revenue without explicit congressional authorisation, and invoking broad statutory authority in a particular domain does not change that. The February tariff decision said it in trade law. The Massachusetts ruling says it in immigration. The principle is the same in both cases, and courts appear to be taking it seriously across doctrinal lines.

This matters because the mechanism of labelling a revenue charge as administrative is not unique to H-1B. The same logic is available to any administration seeking to generate revenue through regulatory action without going to Congress. If Courts consistently hold that the taxing power cannot be exercised through that mechanism regardless of the statutory authority invoked, it forecloses a significant tool of executive economic policy.

It also reframes how practitioners should read broad statutory delegations going forward. A statute that grants the executive authority to impose “conditions” or “restrictions” in a given domain does not, on this analysis, grant authority to monetise those conditions in a way that generates fiscal revenue. The scope of the delegation and the scope of the taxing power are separate questions, and the latter requires separate congressional action.

Whether the First Circuit endorses this reading, and whether the Supreme Court ultimately has to resolve the circuit conflict, will determine how durable this line of reasoning is. For now, the Massachusetts ruling adds a significant data point to an emerging body of constitutional law around executive revenue generation, one that will likely outlast the H-1B fee it struck down.

1. State of California v. Mullin, No. 1:25-cv-13829-LTS (June 8, 2026). ↑

2. Proclamation No. 10973, 90 Fed. Reg. (Sept. 19, 2025) (titled “Restriction on Entry of Certain Nonimmigrant Workers”). ↑

3. Immigration and Nationality Act, 8 U.S.C. §§ 1101–1537 (1965). ↑

4. U.S. Const. art. I, § 8, cl. 1. ↑

5. Administrative Procedure Act, 5 U.S.C. §§ 551–559, 701–706 (1946). ↑

6. Learning Resources, Inc. v. Trump, 146 S. Ct. 628 (2026). ↑

7. Chamber of Commerce of the United States v. United States Department of Homeland Security, No. 1:25-cv-03675 (D.D.C. Dec. 23, 2025), appeal docketed (D.C. Cir. Dec. 29, 2025). ↑

8. Global Nurse Force v. Trump, No. 4:25-cv-08454-HSG (N.D. Cal. filed Oct. 3, 2025). ↑

9. 8 U.S.C. § 1182(f). ↑

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