A federal appeals court on Friday denied the Trump administration’s bid to reinstate its $100,000 H-1B visa fee, leaving the policy vacated nationwide while the underlying legal battle heads toward what immigration lawyers say is a likely confrontation at the Supreme Court.
The Boston-based First Circuit’s stay denial on 24 July reinstates US District Judge Leo Sorokin’s 8 June order vacating the fee policy in full. US Citizenship and Immigration Services and the State Department cannot currently enforce the charge for covered H-1B petitions while the appeal proceeds.
The three-judge panel found the government had failed to show it was likely to succeed on the merits, a standard finding required for a stay. That conclusion leaves the administration’s immigration agenda on H-1B without its most financially dissuasive tool.
First Circuit Holds the H-1B Visa Fee Ruling in Place
The fee was established by Presidential Proclamation 10973, issued 19 September 2025 and effective two days later. It applied specifically to new H-1B petitions for beneficiaries located outside the United States; according to US Citizenship and Immigration Services, it did not apply to amendments, changes of status, or extensions for workers already inside the country.
Judge Sorokin ruled the payment was a tax regardless of how the administration labelled it, a power that belongs to Congress rather than the president. ‘Here, the substance and application of the $100,000 payment reveal that it is a tax, regardless of what the payment is called,’ he wrote.
Sorokin also found that the rapid rollout via presidential proclamation violated the Administrative Procedure Act, because the agencies bypassed mandatory notice-and-comment rulemaking, exceeded their statutory fee-setting authority, and failed to consider employers’ reliance interests or offer a reasoned explanation for the new financial burden. He cited the 2026 Supreme Court decision Learning Resources v. Trump, which had already unravelled a pillar of the administration’s tariff strategy, as precedent for treating the charge as an unlawful tax, according to The Guardian.
The case before the First Circuit is docketed as State of California, et al. v. Mullin, et al., No. 26-01699, brought by 20 Democratic state attorneys general, according to Fragomen.
Brian Hunt, an immigration policy compliance lawyer with Fragomen, Del Rey, Bernsen and Loewy, told Business Insider that the practical effects vary depending on a worker’s location. ‘In light of the 100k fee, there are some workers who were about to lose their job offer but can now get a visa after all,’ he said. Most H-1B workers hired by US employers are already inside the country and were never subject to the charge.
The H-1B programme issues around 65,000 visas per year, plus another 20,000 for workers with advanced degrees. Before the proclamation, employers generally paid between $2,000 and $5,000 in visa-related fees. Court filings in the case show the steep increase sharply reduced demand, with US Citizenship and Immigration Services receiving few payments of the new fee by mid-February.
Separately, USCIS registration data show that total H-1B cap registrations fell from 479,953 in FY2025 to 358,737 in FY2026, with eligible beneficiaries dropping from 470,342 to 343,981 over the same period. Those figures cover the registration period that preceded the fee’s September 2025 effective date and reflect broader shifts in the application pool.
A Circuit Split That May Force the Supreme Court’s Hand
The First Circuit’s decision deepens a direct conflict between federal courts. The US District Court for the District of Columbia reached the opposite conclusion in a separate lawsuit brought by the US Chamber of Commerce and the Association of American Universities, upholding the fee proclamation. That DC case is now before the US Court of Appeals for the DC Circuit, which held oral argument in March 2026, according to Adams and Reese.
With two federal circuits reading presidential authority over H-1B fees in opposite directions, the administration is expected to file an emergency application for a stay with the Supreme Court. Under the Court’s emergency shadow docket procedures, the Justices could rule quickly. If the stay is refused, the fee remains blocked; if it is granted, the $100,000 charge could snap back into effect before the underlying appeals are decided.
The White House did not immediately respond to a request for comment.