Gov. Tim Walz is pitching his first budget under the 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 .

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.

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

Governor Tim Walz and Lieutenant Governor Peggy Flanagan presented their 2025 biennial budget Thursday, calling for a reduction in spending and the first sales tax cut in state history. The budget proposal also calls for closing tax loopholes for services offered by wealth managers and lawyers.

Governor Tim Walz rolled out his 2025 biennial budget on Thursday and it includes the first sales tax cut in state history. Walz also is proposing adding sales tax to other previously untaxed services,