DC Circuit Questions If Trump’s $100,000 H-1B Fee Is a Tax (1)

A federal appellate panel focused Monday on whether a $100,000 Trump fee on H-1B worker petitions should be considered a tax, or a use of presidential authority to restrict entry to the US.

The US Chamber of Commerce and other groups challenging the fee on specialty occupation workers hired from outside the US claim the fee is undercut by a US Supreme Court decision overturning President Trump’s global tariffs regime. That decision, Learning Resources, Inc. v. Trump, held that only Congress has the power to impose revenue raising measures.

Judge Gregory Katsas, a Trump appointee, pressed counsel for the Chamber on whether the size of the charge should count against arguments that it’s a use of tax powers.

“The higher the extraction, the more this approximates a restriction,” Katsas said. “The size of it cuts against you.”

But Adam G. Unikowsky, a partner at Jenner & Block LLP arguing for the Chamber, argued the fee is analogous to alcohol or tobacco taxes designed to deter use. And the stated purpose of the Trump tariffs was to deter trade, not raise revenue, he said.

Even the text of the September proclamation issuing the fees “doesn’t sound like a prohibition at all,” he said.

The case is the first appellate test for the lawfulness of President Trump’s toughest restriction so far on high-skilled immigration, which has drawn multiple challenges.

The Chamber and others argue the president lacks authority to impose fees above the costs of administering the visa program.

A lower court denied the Chamber’s request to temporarily block the $100,000 fee in December, finding the government was likely to prevail with arguments that the president has broad powers to restrict entry of foreign nationals under the Immigration and Nationality Act.

A Northern District of California court is weighing a similar preliminary injunction after a hearing last month in separate litigation challenging the fee.

DC Circuit Judge Michelle Childs, a Biden appointee, pressed counsel for the Trump administration on how it was classifying the charge.

“What are you calling this?” she said. “Is it a fee? Is it a tax? Is it a penalty?”

Department of Justice attorney Tiberius Davis said the label “doesn’t really matter.”

But under a 2012 Supreme Court ruling upholding the Affordable Care Act, the charge doesn’t meet a functional standards test to qualify as a tax, he said.

Statutory Authority

Davis said presidential powers are sweeping enough to even encompass a tax if that’s how the court interpreted the $100,000 charge.

“The President has broad authority to say what restrictions he deems appropriate,” he said.

Circuit Judge Robert Wilkins, an Obama appointee, asked whether the Chamber had identified statutory language explicitly barring the president from imposing the fee or if the administration had rather gone beyond authority conferred by Congress.

Unikowsky said explicit language from lawmakers empowering the president to add the fee would be necessary. If Congress wanted to do so, it could, he said.

“It’s not abusing discretion,” Unikowsky said. “It’s exercising authority the statute doesn’t give.”

Plaintiffs are also represented by Clement & Murphy PLLC, McDermott Will & Schulte LLP, and the US Chamber Litigation Center.

The case is Chamber of Commerce v. DHS, D.C. Cir., No. 25-05473, oral arguments 3/9/26.