Right - if you need a sponsored visa to work then, until you have that sponsorship, you are not authorized to work in the US. So if you ask someone this question, and they answer ‘no’, then if you really want to hire them anyway you can look into sponsoring them for a visa. But if they answer ‘yes’ (and provide the necessary documentation to prove it), you aren’t then supposed to care how they acquired that authorization.

This is complicated a little for transferable sponsored visas like the H1B. Someone already on an H1B might reply ‘yes’ to the work authorization question, but with the caveat that you would need to take on their sponsorship. Technically, their answer should be ‘no’. They aren’t authorized to work for anyone other than their sponsoring employer, in a specific location, with a specific job title. As I say, the point is that if the answer is ‘yes’, not ‘yes but’, or ‘no’, then you’re not permitted to discriminate. Asking someone with work authorization questions about their visa type should be as much of an interview no-no as asking a candidate if she’s pregnant.

Only exception is certain jobs can place citizenship requirements because of security clearance requirements.