Once primarily a producer of raw materials, Minnesota's economy has transformed in the last 200 years to emphasize finished products and services. Perhaps the most significant characteristic of the economy is its diversity; the relative outputs of its business sectors closely match the United States as a whole. The economy of Minnesota had a gross domestic product of $234 billion in 2005. Thirty-six of the United States' top 1,000 publicly traded companies (by revenue in 2006) are headquartered in Minnesota, including Target, UnitedHealth Group, 3M, Medtronic, General Mills, U.S. Bancorp, and Best Buy. The second-largest privately owned U.S. company, Cargill, is headquartered in Wayzata. Minnesota's state budget is currently facing a $935 million deficit.

The per capita income in 2005 was $37,290, the tenth-highest in the nation. The three-year median household income from 2002-2004 was $55,914, ranking fifth in the U.S. and first among the 36 states not on the Atlantic coast. White families earned more income than the national average but among the population under age 18, more than 20% of Asians and Hispanics, more than 40% of African Americans and more than 40% of Native American girls in Minnesota lived in poverty.

Industry and commerce

Minnesota's earliest industries were fur trading and agriculture; the city of Minneapolis grew around the flour mills powered by St. Anthony Falls. Although less than 1% of the population is employed in the agricultural sector, it remains a major part of the state's economy, ranking 6^th in the nation in the value of products sold. The state is the U.S.'s largest producer of sugar beets, sweet corn, and green peas for processing, and farm-raised turkeys. Forestry remains strong, including logging, pulpwood processing and paper production, and forest products manufacturing. Minnesota was famous for its soft-ore mines, which produced a significant portion of the world's iron ore for over a century. Although the high-grade ore is now depleted, taconite mining continues, using processes developed locally to save the industry. In 2004, the state produced 75% of the country's usable iron ore. The mining boom created the port of Duluth which continues to be important for shipping ore, coal, and agricultural products. The manufacturing sector now includes technology and biomedical firms in addition to the older food processors and heavy industry. The nation's first indoor shopping mall was Edina's Southdale Center and its largest is Bloomington's Mall of America.

Minnesota is one of 42 U.S. states with its own lottery; its games include Powerball, Hot Lotto (both multi-state), and Gopher 5.

Energy use and production

The state produces ethanol fuel and is the first to mandate its use, a 10% mix (E10) since 1997, and a 20% mix (E20) in 2013. There are more than 310 service stations supplying E85 fuel. A 2% biodiesel blend has been required in diesel fuel since 2005. As of December 2006 the state was the country's fourth-largest producer of wind power, with 895 megawatts installed and another 200 megawatts planned, much of it on the windy Buffalo Ridge in the southwest part of the state.

State taxes

Minnesota has a slightly progressive income tax structure; the three brackets of state income tax rates are 5.35%, 7.05% and 7.85%. Minnesota is ranked as the 6th highest in the nation for per capita total state taxes. The sales tax in Minnesota is 6.5%, but there is no sales tax on clothing, prescription medications, some services, or food items for home consumption. The state legislature may allow municipalities to institute local sales taxes and special local taxes, such as the 0.5% supplemental sales tax in Minneapolis. Excise taxes are levied on alcohol, tobacco, and motor fuel. The state imposes a use tax on items purchased elsewhere but used within Minnesota. Owners of real property in Minnesota pay property tax to their county, municipality, school district, and special taxing districts.

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