# Tax Token

Base.meme's Tax Token feature gives creators control over token economics through configurable transfer and trade taxes. Instead of platform-assigned creator rewards, creators can set up a tax on their token that generates revenue from every transfer and trade.

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## How Tax Works

A Tax Token charges a configurable percentage on every token transfer and trade. The tax is deducted automatically and accumulates in the token contract. Once the accumulated tax reaches a threshold, the TaxProcessor distributes the funds according to the creator's configured split.

Tax is completely separate from Base.meme's 1% platform trading fee on Tax Tokens. The platform fee is charged on all trades regardless of whether the token has tax enabled.

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## Distribution Channels

When tax is collected, it is distributed across four channels based on the split configured at creation. Each channel serves a different purpose:

| Channel              | Description                                                                                                                           |
| -------------------- | ------------------------------------------------------------------------------------------------------------------------------------- |
| **Funds Recipient**  | Direct revenue sent to the creator's designated wallet address. This is the primary way creators earn from their token.               |
| **Holder Dividend**  | Proportional distribution to all token holders. When this channel is active, a Dividend Contract is deployed to manage distributions. |
| **Token Burn**       | Buyback and burn mechanism that purchases tokens from Uniswap V2 and burns them, permanently reducing the circulating supply.         |
| **Add to Liquidity** | Routes tax funds back into the Uniswap V2 liquidity pool, deepening liquidity and supporting price stability.                         |

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## Configuration During Creation

Tax is configured during token creation and is available in both **Standard** and **Advanced** creation modes. All tax parameters are fixed at creation and cannot be changed afterward.

### Tax Rate

The percentage charged on each token transfer and trade. Setting the tax rate to 0% effectively disables the tax feature.

### Distribution Split

The allocation of collected tax across the four distribution channels, specified in basis points (bps). The total across all four channels must equal 100% of the tax collected.

### Funds Recipient Address

The wallet address that receives the Funds Recipient share of the tax. Defaults to the creator's wallet address.

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## Processing Mechanism

Tax funds accumulate in the token contract until a threshold is reached. At that point, the `TaxProcessor.dispatch()` function distributes the accumulated tax according to the configured split.

* **Anyone can trigger** the dispatch function — it is a public call.
* An **automated bot** monitors tax accumulation and triggers distribution when the threshold is met, so creators and holders generally do not need to call it manually.

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## Dividend Claiming

If the Holder Dividend channel is active, token holders earn a proportional share of the tax allocated to dividends.

* Holders can manually claim their dividends by calling `withdrawDividends()` on the Dividend Contract.
* Automated distributions may also deliver dividends to holders without requiring manual action.

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## Key Points

* **Tax is optional** — creators can set a 0% tax rate to launch without any token tax.
* **Separate from platform fees** — Base.meme's platform trading fee on Tax Tokens (1%) applies to all trades regardless of the token's tax configuration.
* **Immutable after creation** — the tax rate, distribution split, and funds recipient address are all fixed at token creation and cannot be modified later.
* **Available in both modes** — Tax configuration is accessible in both Standard and Advanced creation modes.

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## See Also

* [Vaults](/vaults.md) — automated strategies (SnowBall / BurnDividend / Gift / Split) that manage the Tax Token's revenue.


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