# Tax Distribution

TaxSplit automatically collects a configurable transaction tax and distributes it based on your token’s settings.

### How it works

#### 1) Transaction tax

When someone buys or sells your token, a small percentage (the tax) is automatically collected.

* You set this percentage when creating your token.
* Typical range: **1–10%**.

#### 2) Tax split

The collected tax is split between developers and holders based on your configuration.

Example splits:

* **60%** developers / **40%** holders
* Any ratio that fits your tokenomics

#### 3) Distribution interval

Distributions happen automatically at regular intervals (for example, every **30 minutes**).

This helps balance efficient fee usage with timely rewards.

#### 4) Holder rewards

Holders receive rewards based on your selected distribution model.

The more tokens you hold, the more rewards you earn from each distribution—encouraging long-term holding.

### Distribution models

{% tabs %}
{% tab title="Proportional distribution" %}
Rewards are distributed exactly proportional to token holdings.

If you hold **10%** of supply, you receive **10%** of holder rewards.

* Simple and transparent
* Rewards scale linearly with holdings
* Easy to calculate and predict
  {% endtab %}

{% tab title="Hybrid square root" %}
Rewards are calculated using the **square root of holdings**.

This reduces the gap between large and small holders while still rewarding larger holders more.

* More balanced distribution
* Fairer to smaller holders
* Encourages community growth
  {% endtab %}
  {% endtabs %}

### TaxSplit distribution wallet

This is the official TaxSplit distributor wallet that manages automatic distributions of Solana to **$TAX** token holders.

All tax distributions are processed through this wallet to ensure fair and transparent reward allocation.

* Address: `AFhLwk1Kiw1fWnP7d7Vyszz58SP3tTiG4DctvvHRbEWx`
* Solscan: <https://solscan.io/account/AFhLwk1Kiw1fWnP7d7Vyszz58SP3tTiG4DctvvHRbEWx>


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.taxsplit.app/documentation/taxsplit/tax-distribution.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.