On June 8, 2026, U.S. District Judge Leo Sorokin of the District of Massachusetts vacated the Trump administration's $100,000 fee on new H-1B petitions, ruling that the payment constituted an unconstitutional tax imposed without congressional authorization. Three days later the government appealed to the First Circuit, and Judge Sorokin granted a stay keeping the fee operative while the appeal proceeds. That ruling put two federal district courts in direct conflict: a Washington, D.C. court had upheld the same fee six months earlier. The resulting split makes Supreme Court review increasingly probable before the proclamation expires in September 2026.
What Proclamation 10973 Actually Said
President Trump issued Proclamation 10973 on September 19, 2025, effective September 21, relying on Sections 212(f) and 215(a) of the Immigration and Nationality Act (INA). Section 212(f) allows the President to suspend or restrict the entry of any class of aliens whose presence is found "detrimental to the interests of the United States"—the same authority used for pandemic-era travel bans. The proclamation applied a one-time $100,000 fee to employers filing new H-1B petitions for beneficiaries located outside the US. Renewals with the same employer were exempted, as were petitions filed before September 21. The Secretary of Homeland Security retained discretion to waive the fee on national-interest grounds.
That argument prevailed in Washington. In late December 2025, a D.C. district court upheld the fee in a suit brought by the Chamber of Commerce and the Association of American Universities, finding the proclamation a "straightforward" exercise of Section 212(f) authority. The plaintiffs appealed to the D.C. Circuit.
Why Massachusetts Disagreed
Judge Sorokin's ruling in State of California v. Noem (1:25-cv-13829, D. Mass.)—brought by a coalition of twenty states led by California and Massachusetts—reached the opposite conclusion by reframing the threshold question. The court held that the $100,000 payment was not a condition on entry but a revenue-raising mechanism: in constitutional terms, a tax. The Origination Clause reserves the power to levy taxes exclusively to Congress; a presidential proclamation cannot substitute. The court also found the fee violated the Administrative Procedure Act by bypassing notice-and-comment rulemaking, and exceeded the fee-setting authority the INA already delegates to the executive branch for H-1B petitions.
The distinction is not semantic. Section 212(f) has survived broad judicial scrutiny on the question of who may enter. But courts have consistently treated revenue extraction as a separate matter requiring legislative authorization, regardless of how the executive labels it. If the First Circuit accepts the Massachusetts framing—that this is a tax, not an entry condition—Section 212(f) simply cannot provide shelter.
Steelmanning the Government's Case
The administration's strongest argument is that entry conditions and financial requirements are conceptually continuous. Courts routinely uphold regulatory fees set by agencies without Congress authorizing each specific dollar amount. The Supreme Court's 2018 decision in Trump v. Hawaii read Section 212(f) very broadly to sustain a categorical entry ban on entire nationalities. If the Court defers on categorical exclusions, the argument runs, it should equally defer on conditions that merely impose a cost rather than prohibiting entry outright. The D.C. district court found this logic sufficient to sustain the fee.
The counterargument is that exclusion and extraction are not equivalent. Saying "this class of alien may not enter" is a restriction on entry. Saying "this class of alien may enter, but the employer must first pay $100,000 to the federal treasury" is a revenue measure housed inside an immigration proclamation. The Origination Clause does not bend because the revenue is collected at an immigration checkpoint rather than a tax office.
Innovation at Stake
The practical consequences are considerable. Congress set the H-1B cap at 85,000 annually—65,000 in the base category plus 20,000 for US advanced degree holders—in 2004, and it has not moved since. Pew Research Center data shows approximately 400,000 H-1B approvals in fiscal year 2024, of which 65% were renewals exempt from the fee. The remaining 35%—new employment applications numbering roughly 141,000 in FY2024—bore the full $100,000 burden for beneficiaries located abroad. Indian nationals account for approximately 73% of H-1B approvals, concentrated in computer-related occupations that represent 65% of the entire program.
At that scale, $100,000 per new petition is not friction—it is a selective shutdown. Hyperscalers with hundreds of annual petitions can absorb the cost across a large base; mid-size technology companies, startups, and research universities largely cannot. The fee also structurally disadvantages roles in AI, cloud infrastructure, and semiconductor design that policymakers simultaneously claim to prioritize for national competitiveness. Canada, Germany, and the United Kingdom have moved in the opposite direction—reducing barriers, extending post-study work rights, and fast-tracking critical-occupation visas. A prohibitive entry fee does not redirect global engineering talent toward American employers; it redirects it toward jurisdictions without one.
What Comes Next
The First Circuit must decide whether to continue the district court's stay pending full appellate review. In parallel, the D.C. Circuit will hear the Chamber of Commerce's appeal from the December ruling that upheld the fee. If the two circuits reach opposite conclusions—one calling the fee a tax, the other an entry restriction—the Supreme Court faces a conflict it cannot easily sidestep. Proclamation 10973 expires September 21, 2026, but the administration can extend it, and the underlying constitutional question about executive revenue-raising power through immigration proclamations will outlive any single decree.
Congress holds the cleanest resolution: amend the INA to explicitly authorize fees of this magnitude, removing the constitutional defect the Massachusetts court identified—or repeal the proclamation entirely. Neither appears imminent in a divided legislature. Until then, employers must keep paying while the courts determine who actually holds the authority to charge them.