# Tax Token

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The Tax Token adheres to the  [<mark style="color:green;">**ERC-20 standard**</mark> ](https://ethereum.org/en/developers/docs/standards/tokens/erc-20/)and includes all the core and optional features of a Basic Token, along with taxation capabilities. Creators can <mark style="color:orange;">**customize tax features and set specific tax rates**</mark> to fit their project’s needs. Taxes are fixed and unchangeable after the token’s launch to prevent misuse.

## Tax Collection:

Taxes are collected in the token's smart contract and processed during <mark style="color:orange;">**sell transactions**</mark> or when <mark style="color:orange;">**adding liquidity**</mark>. Once a specific amount of tokens has accumulated, they are handled accordingly. For taxes involving a different currency (e.g. ApeCoin), a transaction occurs that swaps tokens for the other currency.

## Taxation Process:

Creators set up tax configurations before deploying their token. Once the token is launched, tax settings cannot be changed to prevent misuse. For aped tokens, taxes are collected and converted into the native token (e.g. ApeCoin) to repay the fuel and interest. Once repayment is complete, the creator’s chosen tax features take effect. Taxes are collected at the same total rate as the configured token.

## Impact on Whitelisted Wallets:

Whitelisted wallets are subject to buy and sell taxes to avoid exploitation but are exempt from transfer taxes. These wallets also do not receive reward distributions.

## Advantages of a Tax Token:

Tax tokens offer the opportunity to generate passive revenue from trading volume, boost liquidity pool size, and reward token holders. These benefits can be combined and earned in increments without needing to <mark style="color:orange;">**sell team-held tokens**</mark>, making it more manageable for the team and more appealing to holders and investors.


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