A new ruling issued Monday by a federal judge blocks a $100,000 tax on H-1B visas declared by President Donald Trump. What does that mean, and how did we get here? Let’s find out.
What is the H-1B visa program?
According to the Government Accountability Office, the H-1B visa program was established by Congress and it began in 1990. Its purpose is to allow U.S. employers to hire temporary, foreign workers in specialty occupations.
“The H-1B program applies to employers seeking to hire nonimmigrant aliens as workers in specialty occupations or as fashion models of distinguished merit and ability,” per the U.S. Department of Labor.
One notable person who has worked in the U.S. on an H-1B visa is South African entrepreneur Elon Musk, who then became a citizen in 2002. These visas are often found among people working in the U.S. tech industry, with The Washington Post reporting that H-1B visas have “long been a lifeblood for Silicon Valley.”
Pew Research Center data published last year indicated that around 400,000 applications for H-1B visas were approved in 2024 and that denial rates dropped to 2% in 2022. Most (73%) of H-1B visa holders were born in India, according to Pew.
That $400,000 figure might seem quite high considering there is a 65,000 cap on H-1B visas, along with a 20,000 extension for individuals with a master’s degree or higher. However, many government and non-profit research institutions are not subject to the cap.
“H-1B workers and their dependents contribute $86 billion annually to the economy and pay $35 billion in federal and payroll taxes, on top of $11 billion in state and local taxes,” said Mayes’ office.
In late 2024, even before Trump officially began his second term in the White House, H-1B visas got pulled into a controversy among conservatives on X when some criticized Trump’s appointment of venture capitalist Sriram Krishnan, who is from India, as his adviser on artificial intelligence policy. While the choice sparked anti-Indian backlash and concerns about Americans missing out on jobs among some of Trump’s supporters, Musk, who owns X and had not yet had his public falling-out with Trump, defended the program in at least one post.
“This is like bringing in the Jokic’s or Wemby’s of the world to help your whole team (which is mostly Americans!) win the NBA. Thinking of America as a pro sports team that has been winning for a long time and wants to keep winning is the right mental construct.”
How did the Trump administration change the H-1B program?
Trump issued a proclamation ordering an “unprecedented” $100,000 tax payment for new H-1B visa petitions last September, per a Monday press release from Arizona Attorney General Kris Mayes, a Democrat. Mayes’ press release said the move undermined the purpose of the program “by making it harder to address severe labor shortages in critical fields such as education and healthcare and ultimately worsening the staffing crisis.”
It said that a series of written documents from the Department of Homeland Security show how the policy impacted applications filed after Sept. 21 of last year. Furthermore, Mayes’ office said Secretary of Homeland Security (at that time Kristi Noem) had “broad discretion to determine which petitions are subject to the fee or for an exemption, raising concerns that the enforcement could be applied selectively against employers disfavored by the Trump Administration.”
“The $100,000 visa tax was devastating for all states, including Arizona, and threatened the quality of education, healthcare, and other core services available to our residents,” said Mayes’ press release.
So far, the second Trump administration has also made headlines for revoking visas for international students at colleges across the U.S. Through an executive order in September, Trump also established the Trump Gold Card to “facilitate the entry of aliens who have demonstrated their ability and desire to advance the interests of the United States by voluntarily providing a significant financial gift to the Nation,” of $1 million and a $15,000 processing fee.
What did Monday’s ruling do, and how did the Trump administration react?
Judge Leo T. Sorokin ruled that the $100,000 tax in H-1B visas was unlawful and it vacated certain agency actions related to the tax in a judgement filed in the United States District Court of Massachusetts. He noted that plaintiffs from 20 states have sued over the action and said that Trump had no power to establish the fee on the visas. CBS News noted that Sorokin was appointed by Trump’s Democratic predecessor, former President Barack Obama.
“Under President Trump and [current DHS Secretary Markwayne Mullin], our immigration system is being reformed to serve American citizens, American workers, and American families and to preserve our national identity – not to rapidly import foreigners who take American jobs, commit crimes, burden our welfare system, and erode our cultural and social fabric,” said a statement from the agency cited by the Associated Press.
White House spokesperson Taylor Rogers said the administration “is confident this order will be reversed on appeal,” in a separate statement cited by the outlet.
