A federal appeals court on July 24, 2026, rejected President Donald Trump’s bid to reinstate a $100,000 fee on new H-1B visas, upholding a lower court’s ruling that the charge constituted an unlawful tax. The decision, delivered by the First Circuit Court of Appeals, blocks the Trump administration’s attempt to impose the fee on foreign workers, which had faced immediate legal challenges from 20 Democratic states.
The Boston-based First Circuit Court of Appeals refused to pause a June 8 ruling by U.S. District Judge Leo Sorokin, who struck down the fee as exceeding presidential authority by effectively creating a tax without congressional approval. The court’s three-judge panel, composed entirely of Democratic appointees, found the Trump administration failed to demonstrate a likely chance of success on appeal. The ruling preserves the fee’s invalidation, leaving the H-1B program’s original $2,000–$5,000 visa processing costs in place.
The Legal Battle Over the H-1B Fee
The dispute centered on Trump’s September 2025 proclamation, which raised H-1B visa costs to $100,000, arguing the program has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor.
The fee, which applied only to new foreign workers, was criticized as a blunt tool to curb outsourcing, but courts ruled it violated the Constitution’s separation of powers by bypassing Congress’s tax authority.
U.S. District Judge Leo Sorokin’s June 8 decision emphasized that the $100,000 payment constituted an unlawful tax Congress never authorized,
a stance echoed by the appeals court. The administration had argued the fee was a legitimate exercise of executive power under immigration and foreign commerce laws, but the judges found no evidence to support that claim. Here, the substance and application of the $100,000 payment reveal that it is a tax, regardless of what the payment is called,
Sorokin wrote.
Impact on Employers and Tech Companies
Data from U.S. Citizenship and Immigration Services shows a sharp decline in H-1B applications following the fee’s announcement. For example, Amazon saw its approved H-1B applications drop from 4,647 in the first quarter of 2025 to 3,057 in the same period of 2026. Similar declines were reported at Google, Meta, and Microsoft, though Nvidia bucked the trend, increasing its H-1B applications amid its AI expansion efforts.
The Trump administration had framed the fee as a measure to prioritize U.S. workers, but critics argued it unfairly targeted foreign talent. The H-1B program, which grants 65,000 visas annually plus 20,000 for advanced-degree holders, is critical for tech companies seeking specialized skills. Employers had previously paid $2,000–$5,000 in fees, a fraction of the proposed charge.
Broader Implications for Immigration Policy
The court’s ruling underscores the limits of executive power in reshaping immigration policy without congressional backing. It also highlights the legal vulnerabilities of Trump-era initiatives, which have faced repeated challenges in court. The decision leaves unresolved questions about the administration’s broader immigration agenda, including its plans to reform the H-1B program through other means.
Meanwhile, the case is one of several ongoing challenges to Trump’s policies. Separate lawsuits are pending in the Northern District of California and the D.C. Circuit Court, though the First Circuit’s decision sets a precedent that could influence those cases. The White House has not commented on the latest ruling, but the administration’s legal team has signaled it may appeal the decision to the Supreme Court.
For now, the H-1B program remains unchanged, preserving access to foreign talent for U.S. tech firms. However, the legal battle reflects deeper tensions over immigration, economic priorities, and the balance of power between the executive branch and Congress. As the debate continues, the courts will likely remain a key battleground for shaping the future of U.S. immigration policy.
