Vermont Business Magazine A final ruling was issued by the U.S. District Court of Massachusetts yesterday, finding the Trump Administration’s policy imposing a $100,000 tax payment on new H-1B visa petitions unlawful and vacating it.
H-1B visas allow U.S. employers to hire highly skilled foreign national workers in roles that require specialized skills, including as teachers, physicians, researchers, nurses, and other vital workers, to alleviate nationwide labor shortages. The tax created a costly barrier for employers, weakened the economy, and disrupted essential services, especially for public sector and government employers trying to fill these positions. Attorney General Clark joined a multistate coalition in challenging the policy late last year.
“President Trump’s unlawful tax on the H-1B program served only to hamper Vermont’s efforts to fill critical positions in health care, technology, and education,” said Attorney General Clark. “I’m glad the court put an end to yet another blatantly unlawful action by this Administration.”
BACKGROUND
The H-1B visa program allows employers to petition for highly skilled foreign workers to temporarily fill positions in specialty occupations that require at least a bachelor’s degree. In petitioning for an H-1B worker, the employer must submit an application, certified by the U.S. Department of Labor, that employment of the H-1B worker will not negatively affect the wages and working conditions of similarly employed U.S. workers.
Congress limits the number of H-1B visas available each year for most private employers, with the current cap set at 65,000, with an exemption of 20,000 for individuals with a master’s degree or higher. Many government and non-profit research organizations are exempt from the 65,000-person cap to ensure that the organizations are fulfilling their public service missions.
Since its inception, the H-1B visa program has been continually tailored by Congress to carry out its purpose of meeting employers’ labor needs, while protecting the interests of American workers to ensure that they are not wrongfully displaced. Congress has repeatedly enhanced enforcement, increased penalties, and legislated fees for H-1B petitions to prevent misuse of the program. Given its careful structure, the H-1B program has proven to be massively beneficial to the United States.
The program has been especially important to state and local governments faced with worker shortages in critical fields like education and healthcare, which have turned to H-1B visas to provide for the basic needs of residents. 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.
On September 19, 2025, President Trump issued a proclamation ordering an unprecedented $100,000 tax payment for new H-1B visa petitions, undermining the very purpose of the H-1B visa by making it harder to address severe labor shortages in critical fields such as education and healthcare and ultimately worsening the staffing crisis.
As implemented by DHS through a series of written documents, the policy affected any application filed after September 21, 2025, and granted the Secretary of Homeland Security 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 Vermont, and threatened the quality of education, healthcare, and other core services available to our residents.
6.9.2026. Attorney General’s Office | 109 State Street | Montpelier, VT 05609-0101 | ago.vermont.gov
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