Gov. Tim Walz is pitching his first budget under the new Trump era as a counterweight to the incoming president’s threats to impose tariffs, which he says will raise costs on everyday Minnesotans. His plan would lower Minnesota’s sales tax rate for the first time in state history by 0.

In regards to the statewide sales tax, Walz is proposing a .75% reduction to the tax rate alongside provisions to expand the sales tax base to close so-called "loopholes" for service providers, such as bankers and attorneys.

House and Senate Republicans balked at Walz’s recommendations and signaled they would resist any new taxes or fees.

Walz focused on tackling fraud, cutting state spending and long-term fiscal stability in Minnesota’s 2026-27 budget.

Gov. Tim Walz's budget proposal would make changes to sales tax collections and trim state spending in an effort to stave off a steep shortfall in future years.

He wants to cut the statewide sales tax by 0.075% — which is $0.075 on a $100 purchase — moving it to 8.6% from 8.675%.

Minnesota Governor Tim Walz has proposed his annual budget, and this year, he’s taken a slimmed-down approach. The governor unveiled his budget on Thursday.

Gov. Tim Walz on Thursday pitched a tighter two-year budget, complete with spending pullbacks and other measures to keep a potential deficit at bay. He also proposed a lower state