Seattle’s reported retail-trade sales rose 6.7% in the first quarter of 2026 compared with a year earlier. Bellevue’s fell 3.7%. On that measure, Seattle had the stronger start to the year.
But the broader taxable-sales figures need more care. Washington began taxing additional services in October 2025, changing what those totals capture. An increase can reflect more economic activity, a wider tax base, or both.
That distinction matters when a headline about Seattle’s economy turns a tax report into a verdict on how residents and businesses are doing. The data offer useful evidence, but different measures answer different questions.
The comparison, using the same quarter
We analyzed the Washington Department of Revenue’s first-quarter 2026 city sales table, comparing January–March 2026 with January–March 2025. All figures below are reported dollar values, without an inflation adjustment.
| Measure | Seattle | Bellevue |
|---|---|---|
| All taxable sales, Q1 2025 | $7.779 billion | $2.358 billion |
| All taxable sales, Q1 2026 | $8.527 billion | $2.472 billion |
| Change in all taxable sales | +9.6% | +4.8% |
| Retail-trade taxable sales, Q1 2025 | $2.221 billion | $917.2 million |
| Retail-trade taxable sales, Q1 2026 | $2.369 billion | $883.1 million |
| Change in retail-trade sales | +6.7% | −3.7% |
Seattle’s retail-trade growth exceeded Bellevue’s by 10.4 percentage points. Its retail-trade sales increased by approximately $147.8 million, while Bellevue’s decreased by $34.2 million.
These figures compare markets of very different sizes. Seattle’s larger dollar total is unsurprising; the more interesting finding is their different direction of change.
Why both cities can report growing taxable sales while retail moves in opposite directions
“Taxable retail sales” sounds like a measure of shopping. In Washington’s reporting, it reaches much further.
The Department of Revenue explains that total taxable sales include transactions in construction, manufacturing, services, and other sectors. Retail trade is the narrower group of businesses classified in NAICS sectors 44 and 45. It includes businesses selling goods such as clothing, furniture, and vehicles. Restaurants belong to a different industry classification.
In Q1 2026, retail trade represented approximately 27.8% of Seattle’s total taxable sales and 35.7% of Bellevue’s. Most taxable sales in both cities therefore sat outside that retail-trade subset.
For Bellevue, the distinction changes the story substantially. Its overall taxable-sales total grew, while its retail-trade subset shrank. For Seattle, both grew, but at different rates.
A resident interested in local shopping, a restaurant owner checking the dining economy, and a contractor assessing construction demand should not all use the same headline number.
The October 2025 change complicates the growth story
According to Washington DOR’s explanation of newly taxable services, the tax base expanded on October 1, 2025. The affected categories include certain advertising, IT, website development, software, security, staffing, and live-presentation services, subject to the applicable exclusions.
Q1 2026 includes the expanded tax rules; Q1 2025 predates them. Consequently, the 9.6% and 4.8% total-sales increases are not clean measures of like-for-like demand growth.
The city totals do not isolate how much of either increase came from newly taxable services. They also do not show that the law explains the gap between Seattle and Bellevue. Establishing that would require a more detailed decomposition.
The retail-trade subset narrows the industry question, but it is still a reported-dollar measure. It is not a count of items sold, store visits, or household purchases, and it remains sensitive to prices, business classification, and the mix of goods sold.
One quarter does not establish a permanent winner
Looking back changes the perspective again.
| Retail-trade comparison | Seattle | Bellevue |
|---|---|---|
| Q1 2025 versus Q1 2024 | −1.9% | +3.0% |
| Full-year 2025 versus full-year 2024 | +0.3% | +1.8% |
| Q1 2026 versus Q1 2025 | +6.7% | −3.7% |
Source: our calculations from DOR’s Q1 2025, calendar-year 2025, and Q1 2026 city tables.
Bellevue had stronger reported retail-trade growth in the earlier comparisons. Seattle’s early-2026 growth also followed a weaker first quarter in 2025.
To look beyond that lower comparison base, we compared Q1 2026 directly with Q1 2024. Seattle’s retail-trade sales were approximately 4.7% higher across those two years. Bellevue’s were approximately 0.8% lower. These remain nominal changes, but they show that the early-2026 divergence is not explained solely by Seattle’s weak 2025 quarter.
What this means for people making local decisions
For residents, the figures offer a reason to question sweeping claims that one city’s entire economy is thriving while the other’s is failing. Retail trade, construction, restaurants, professional services, and household finances can move differently.
For a shop owner, Seattle’s retail-trade increase is a useful market signal. It cannot establish that a specific shopping district, product category, or storefront is performing well. Citywide sales can be affected by a small number of large businesses, changes in purchasing channels, and transactions assigned under tax-sourcing rules.
For someone choosing a business location, the next questions are practical: What is happening in the relevant industry? Who are the customers? What do rent, foot traffic, competition, and operating costs look like? A city sales total can frame that research, but cannot replace it.
It would also be a mistake to divide these sales by population and call the result what an average Seattle or Bellevue resident spends. Visitors, commuters, businesses, and delivery destinations all complicate that interpretation.
How we calculated the figures
We downloaded DOR’s city workbooks on October 28, 2026. Q1 2026 was the latest city quarterly table we located and retrieved for this analysis; the article does not describe conditions through September or October 2026.
Growth is calculated as (current sales ÷ prior sales − 1) × 100. Retail share divides retail-trade taxable sales by all-industry taxable sales. Two-year comparisons use Q1 2024 values from the Q1 2025 workbook and Q1 2026 values from the Q1 2026 workbook. Tables are rounded for reading; calculations use the original dollar values.
Taxable sales are neither the amount of tax collected nor all spending in the local economy. Our analysis does not estimate inflation-adjusted sales, identify shoppers’ home cities, or establish why sales changed. Updated tax returns may revise reported totals.
The most useful next release will show whether the Seattle–Bellevue retail divergence persists. Until then, Seattle’s stronger Q1 retail-trade result is a dated finding worth understanding, rather than a forecast about either city’s future.
A practical action plan for Seattle business owners
Use this city comparison to form a testable question about your own customers. The figures describe Q1 2026; they do not establish current demand in your neighborhood or justify changing a budget on their own.
| Your business | Action to take | Measure that decides whether it helped |
|---|---|---|
| Retailer or online store | Compare your own sales for matching dates, separating completed orders from average order value. Break out delivery or store locations where reliable records allow it. | Orders, average order value and gross profit; a revenue increase driven only by prices may not mean more customers. |
| Service business | Compare qualified inquiries and completed jobs by the areas you actually serve. Use consistent qualification rules for Seattle and Bellevue. | Cost per qualified lead, lead-to-customer rate and contribution profit per acquired customer. |
| Business serving both cities | Test the same offer on two accurately described location pages or geographically separated campaigns. Keep the offer, dates and conversion definition comparable. | Qualified leads and acquired customers per area, with each area’s spend or traffic shown alongside the results. |
| Restaurant, café or hospitality operator | Start with your own bookings, covers and repeat visits; restaurant demand is not represented by the NAICS 44–45 retail-trade subset. | Reservations, completed visits, average check and repeat-customer rate. |
Turn the finding into a 30-day test
Week 1: Record a baseline from your own comparable dates and identify one product, service or location to test. Confirm that inquiry forms, calls and purchases are being counted consistently. Weeks 2–3: Run one change within a fixed portion of your existing marketing budget. Week 4: Review qualified inquiries, closed customers and contribution profit. Carry on only if the result supports the business case; low-volume results need more observation.
A worked planning example, not a Seattle market benchmark: if a new customer generates $300 in contribution profit before acquisition costs, 20% of qualified leads become customers, and you allocate 50% of that contribution to acquisition, your planning ceiling is $300 × 20% × 50% = $30 per qualified lead. Define contribution consistently and check that the remaining margin covers overhead and the profit you need. Clicks and raw form submissions are not the same as qualified leads.
For search and email, make the offer specific: a real delivery area, an available appointment, an in-stock category or a reason to return. Create distinct city pages only when each contains useful local information. Review an email campaign against an appropriate comparison group when practical, so regular repeat purchases are not automatically credited to the campaign.
Data sources, interpretation and corrections
The comparison tables in this article are the derived dataset described below. Source periods and calculation methods appear in the article; no separate machine-readable download or reuse license is claimed.
Public-source data and the calculation methods are identified above. Practical action plans and financial examples are our interpretation; example values are illustrative and are not findings from the Seattle datasets. To flag a source change or calculation issue, contact Seattle Organic SEO with the article title, table and source period.
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Written by the Seattle Organic SEO Team
The Seattle Organic SEO team combines more than 30 years of hands-on client experience across SEO, paid media, email marketing and affiliate marketing. Our team has worked for leading technology companies, including Amazon, Expedia and Google-acquired DoubleClick. We bring that experience to source-based research, transparent analysis and practical guidance for Seattle businesses. Learn more about our team and approach.