Taxes in Olympia
Washington's no state income tax and Olympia's own genuinely high 10.0% combined sales tax (as of July 2026) apply to Olympia residents, layered with the state's real, current capital gains excise tax on high earners.
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Learn moreNo state personal income tax
Washington has no state personal income tax -- a real, structural advantage for Olympia residents, funded instead through sales taxes, business taxes, and (for high earners specifically) the capital gains excise tax.
Olympia's genuinely high 10.0% combined sales tax
Olympia's minimum combined sales tax rate reached 10.0% in July 2026, up from 9.8% -- Washington's 6.5% state rate plus local and transit add-ons. This runs genuinely higher than several other Washington markets in this dataset (Yakima's 8.5%, Bellingham's 9.2%), worth weighing directly against the income-tax savings.
The capital gains excise tax: a real, current tax on high earners specifically
Enacted in 2021 and upheld by the Washington Supreme Court in 2023 as a constitutional excise tax (not an income tax), Washington's capital gains tax applies a 7% base rate to long-term gains above an annual threshold, with a 2025-added 9.9% top marginal rate on gains above $1 million. Real estate sales and retirement accounts are fully exempt -- a genuinely narrow-base tax, not a broad income tax, but real and current for high earners relocating to Olympia.
Property tax: Thurston County runs near the statewide average
Thurston County's effective property tax rate is cited at 0.88% by one source (with a real, disclosed 0.86%-0.96% spread across sources), close to Washington's own statewide average of roughly 0.73%-0.84% depending on source.
Key takeaways
- Washington has no state personal income tax, a real, structural advantage for Olympia residents.
- Olympia's combined sales tax reached a genuinely high 10.0% in July 2026 -- higher than several other Washington markets in this dataset.
- Washington's capital gains excise tax (7% base, 9.9% above $1M) is real and current for high earners, though it exempts real estate and retirement accounts.
- Thurston County's effective property tax rate runs around 0.88%, close to Washington's statewide average.
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