diff --git a/bridge_ui/src/hooks/useHandleTransfer.ts b/bridge_ui/src/hooks/useHandleTransfer.ts
index d274685b0..6a62aef35 100644
--- a/bridge_ui/src/hooks/useHandleTransfer.ts
+++ b/bridge_ui/src/hooks/useHandleTransfer.ts
@@ -58,7 +58,7 @@ import {
 import { getSignedVAAWithRetry } from "../utils/getSignedVAAWithRetry";
 import parseError from "../utils/parseError";
 import { signSendAndConfirm } from "../utils/solana";
-import { waitForTerraExecution } from "../utils/terra";
+import { waitForTerraExecution, calculateTerraTax } from "../utils/terra";
 import useTransferTargetAddressHex from "./useTransferTargetAddress";
 
 async function eth(
@@ -198,11 +198,13 @@ async function terra(
   dispatch(setIsSending(true));
   try {
     const amountParsed = parseUnits(amount, decimals).toString();
+    const amountTaxed = await calculateTerraTax(amountParsed, asset);
     const msgs = await transferFromTerra(
       wallet.terraAddress,
       TERRA_TOKEN_BRIDGE_ADDRESS,
       asset,
       amountParsed,
+      amountTaxed,
       targetChain,
       targetAddress
     );
diff --git a/bridge_ui/src/utils/terra.ts b/bridge_ui/src/utils/terra.ts
index 138d275f9..a0c703ace 100644
--- a/bridge_ui/src/utils/terra.ts
+++ b/bridge_ui/src/utils/terra.ts
@@ -1,6 +1,6 @@
 import { isNativeTerra } from "@certusone/wormhole-sdk";
 import { formatUnits } from "@ethersproject/units";
-import { LCDClient } from "@terra-money/terra.js";
+import { LCDClient, Dec, Int } from "@terra-money/terra.js";
 import { TxResult } from "@terra-money/wallet-provider";
 // import { TerraTokenMetadata } from "../hooks/useTerraTokenMap";
 import { TERRA_HOST } from "./consts";
@@ -37,3 +37,24 @@ export async function waitForTerraExecution(transaction: TxResult) {
   }
   return info;
 }
+
+export async function calculateTerraTax(
+  amount: string,
+  denom: string
+): Promise<string> {
+  try {
+    // Fetch terra tax state from current chain height.
+    const lcd = new LCDClient(TERRA_HOST);
+    const taxRate = await lcd.treasury.taxRate();
+    const taxCap = await lcd.treasury.taxCap(denom);
+
+    // Calculate tax rate for the current denomination.
+    const untaxed = new Int(amount);
+    const tax = untaxed.toDec().mul(taxRate);
+    const cap = (taxCap.amount as Int).toDec();
+    const min = new Dec((tax.constructor as any).min(tax, cap));
+    return untaxed.sub(min.toInt()).toString();
+  } catch(e) {
+    return "0";
+  }
+}
diff --git a/sdk/js/src/token_bridge/transfer.ts b/sdk/js/src/token_bridge/transfer.ts
index b91579098..c57c3d281 100644
--- a/sdk/js/src/token_bridge/transfer.ts
+++ b/sdk/js/src/token_bridge/transfer.ts
@@ -87,6 +87,7 @@ export async function transferFromTerra(
   tokenBridgeAddress: string,
   tokenAddress: string,
   amount: string,
+  taxed: string,
   recipientChain: ChainId,
   recipientAddress: Uint8Array
 ) {
@@ -108,7 +109,7 @@ export async function transferFromTerra(
           {
             initiate_transfer: {
               asset: {
-                amount: amount,
+                amount: taxed,
                 info: {
                   native_token: {
                     denom: tokenAddress,
diff --git a/terra/contracts-5/token-bridge/src/msg.rs b/terra/contracts-5/token-bridge/src/msg.rs
index b85a0dc75..fb2b0bd6d 100644
--- a/terra/contracts-5/token-bridge/src/msg.rs
+++ b/terra/contracts-5/token-bridge/src/msg.rs
@@ -2,6 +2,7 @@ use cosmwasm_std::{
     Binary,
     Uint128,
 };
+use terraswap::asset::{Asset, AssetInfo};
 use schemars::JsonSchema;
 use serde::{
     Deserialize,
@@ -27,9 +28,14 @@ pub enum ExecuteMsg {
         asset_id: Binary,
     },
 
+    DepositTokens {},
+    WithdrawTokens {
+        asset: AssetInfo,
+    },
+
+
     InitiateTransfer {
-        asset: HumanAddr,
-        amount: Uint128,
+        asset: Asset,
         recipient_chain: u16,
         recipient: Binary,
         fee: Uint128,
@@ -41,7 +47,7 @@ pub enum ExecuteMsg {
     },
 
     CreateAssetMeta {
-        asset_address: HumanAddr,
+        asset_info: AssetInfo,
         nonce: u32,
     },
 }
diff --git a/terra/contracts/token-bridge/src/contract.rs b/terra/contracts/token-bridge/src/contract.rs
index 4adcb6acc..3ee6de0e2 100644
--- a/terra/contracts/token-bridge/src/contract.rs
+++ b/terra/contracts/token-bridge/src/contract.rs
@@ -193,14 +193,18 @@ fn deposit_tokens<S: Storage, A: Api, Q: Querier>(
     deps: &mut Extern<S, A, Q>,
     env: Env,
 ) -> StdResult<HandleResponse> {
-    for fund in env.message.sent_funds {
-        let deposit_key = format!("{}:{}", env.message.sender, fund.denom);
-        bridge_deposit(&mut deps.storage).update(deposit_key.as_bytes(), |amount: Option<Uint128>| {
-            match amount {
-                Some(v) => Ok(v + fund.amount),
-                None => Ok(fund.amount)
-            }
-        })?;
+    for coin in env.message.sent_funds {
+        let asset = Asset {
+            amount: coin.amount.clone(),
+            info: AssetInfo::NativeToken {
+                denom: coin.denom.clone(),
+            },
+        };
+        let deducted_amount = asset.deduct_tax(&deps)?.amount;
+        let deposit_key = format!("{}:{}", env.message.sender, coin.denom);
+        bridge_deposit(&mut deps.storage).update(deposit_key.as_bytes(), |amount: Option<Uint128>|
+            Ok(amount.unwrap_or(Uint128(0)) + deducted_amount)
+        )?;
     }
 
     Ok(HandleResponse {