The Trump administration has told a federal appeals court that a $100,000 payment tied to certain H‑1B visas is a lawful immigration restriction, not a tax, as it looks to reverse a lower court ruling blocking the policy.

In a June 18 court filings, the administration argued in the the US Court of Appeals for the First Circuit that the fee was imposed falls within the president’s broad authority over immigration, after a district judge ruled the measure likely exceeded that authority by effectively creating a tax without congressional approval.

President Donald Trump’s proclamation requires certain employers seeking new H‑1B visas to pay $100,000 as a condition of entry for foreign workers. The administration said the policy was imposed after determining what they described as misuse of the visa program.

The administration also argued in court the policy addressed national security risks, warning that without it more foreign workers could enter despite concerns about its impact upon U.S. interests.

Why It Matters

Criticism of the H‑1B program has long centered on claims that it is used to displace U.S. workers or suppress wages, while supporters say it helps employers fill specialized roles in critical industries such as healthcare and engineering. The administration cited such concerns in defending the proclamation, describing the program’s alleged “large-scale replacement of American workers” and wage impacts in court filings.

What To Know

The H‑1B visa program allows U.S. employers to temporarily hire foreign workers in specialty occupations. Federal law caps most new visas at 65,000 per year, with an additional 20,000 available for workers with advanced U.S. degrees.

The Departments of Homeland Security and State Department were directed to deny new H‑1B petitions not accompanied by the payment and to verify the fee before issuing visas, according to the government’s filing.

A coalition of states challenged the policy, arguing it exceeded presidential authority and effectively imposed a tax without congressional approval. On June 8, a federal district court in Massachusetts agreed, ruling that the payment functioned as a tax not clearly authorized by Congress and vacating the fee.

“The President had no power or delegated authority to impose a tax on H-1B petitions,” US District Judge Leo Sorokin wrote in a 42-page decision.

The administration has appealed and is seeking a stay of that ruling. In its filing, the government said the district court erred in treating the payment as a tax, arguing instead that it is a condition on entry similar to other immigration-related fees and restrictions.

“Every day that passes more aliens can petition and enter the country despite the President’s determination that their entry would be detrimental,” the administration attorney's said in its court filing reviewed by Newsweek. “And even if Defendants ultimately prevail on appeal, it will be difficult to revoke those visas and remove aliens who did not pay.”

Justice Department lawyers pointed to provisions of the Immigration and Nationality Act that allow the president to “impose on the entry of aliens any restrictions he may deem to be appropriate,” arguing that authority includes requiring a one-time payment.

They also said the payment is not designed to raise revenue but to regulate immigration by discouraging reliance on foreign labor and encouraging the hiring of U.S. workers.

The court said the payment amounted to a tax, making the policy unlawful under the Administrative Procedure Act by exceeding statutory authority and bypassing required rulemaking procedures.

What Happens Next

The case now before the First Circuit is expected to focus on whether the payment is a permissible immigration restriction or an unlawful tax imposed without congressional authorization, a question that could shape the scope of presidential authority over employment-based visa programs.