Inflation-adjusted taxable retail sales in Thurston County have steadily increased since 2012, despite economic disruptions such as the COVID-19 pandemic.
The majority of taxable retail sales spending is in the northern portion of the county:
76% of sales occurred in Lacey, Olympia, and Tumwater
5.5% of sales occurred in Bucoda, Rainier, Tenino, and Yelm
18% of sales occurred in unincorporated Thurston County
Olympia had the highest amount of taxable retail sales per capita ($49,401 per person), followed by Tumwater, Lacey, and Yelm. Bucoda had the lowest amount of taxable retail sales per capita ($6,644 per person).
The Retail Leakage Coefficient is a comparison of expected retail sales (based on population) to actual retail sales. A coefficient of 1 indicates that a community is capturing retail sales equal to expected spending by local residents. If the coefficient is less than 1, the community’s residents are spending their dollars elsewhere. Olympia has consistently had the highest retail leakage coefficient with the exception of 2020, when Tumwater overtook Olympia.
Taxable Retail Sales
Residential and nonresidential purchases in Thurston County are measured by taxable retail sales. The measure shows changes in the overall amount of money spent within the County and depicts where purchases occurred. The amount of taxable retail sales is particularly important to local government finance, as taxable retail sales contribute to the sales tax collected by communities. Sales taxes help fund government services, such as public transportation and law enforcement.
In communities where sales tax revenue is low, residents are required to fund a greater proportion of the services cities provide through property taxes or other fees. State law limits property tax increases to 1% per year. In many years this increase does not provide enough extra revenue to keep pace with inflation. As a result, expanding businesses and sales is essential to provide stable funding for local governmental services and programs.