Minnesota Q1 Tax Revenue Beats Forecast by $897 Million

St. Paul, MN (MinnesotaNow) - Minnesota tax collections for the first quarter of the new fiscal year exceeded the forecast by double-digit percentages.

Minnesota General Fund Revenue Tops $8.6 Billion

A new Revenue and Economic Update issued by Minnesota Management and Budget shows that overall net general fund revenues during July, August, and September totaled just over $8.6 billion. The report states that the total was $897 million, or 11.6%, higher than projected in the latest state revenue forecast, which was issued in February.

The report also shows that tax collections across all major tax categories were more than what was forecasted for the three-month period.

Minnesota Management and Budget

Individual Income Taxes Generate Nearly $4.5 Billion

The state agency says individual income tax collections accounted for nearly $4.5 billion in revenue during the first quarter. The total was $441 million, or nearly 11%, higher than projected.

The next-largest revenue source, the state’s sales tax, generated nearly $2.3 billion, which was $122 million, or 5.6%, above the forecast.

The report indicates that corporate tax payments exceeded $1 billion and were 28% higher than projected, while revenue generated by fees and other miscellaneous sources was 17% higher than predicted, at $784 million.

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Previous Fiscal Year Revenue Total

Looking back at the previous fiscal year, which ended in June, Minnesota’s overall general fund revenues totaled just under $33.5 billion. The report says that was $219 million, or slightly less than 1%, above the level projected in the February state revenue forecast.

Minnesota Management and Budget

Economic Outlook Revised

The economic consultant used by the state of Minnesota to develop its revenue forecast says the outlook for U.S. gross domestic product growth this year has weakened since the February report was issued. However, the longer-term outlook for 2027 and 2028 has improved. GDP growth for 2026 is now forecast at 2.4%, followed by 2.7% in 2027 and 2.4% in 2028.