Shizeric some sand is toxic. I have seen sand with stickers that say toxic may cause cancer.
This is true. The term "toxic" can mean many things. In dealing with caudates (and all amphibians for that matter, the source and type of sand comes into play. Sand made for or from concrete and other masonry products may not be toxic per say, but they often contain high amounts of lime and/or Portland cement, both of which will drive your pH up to very high, dangerous levels.
For other examples, play sand from the Great Lakes region of the USA has a very high potential to be polluted with all sorts of nasty chemicals as it is most often dredged up from the lakes. Sand of marine origin is a triple threat as it is usually composed of aragonite (a form of calcium carbonate), is contaminated with salt, and in the case of many off-the-shelf brands contains live marine organisms or their eggs, which will die in a freshwater tank and wreak havoc on your water chemistry.
Generally speaking, play sand is usually safe. The only real issue I have with it is much of it contains quite a bit of hematite and magnetite. These forms of iron are not really a direct toxic threat, but when the water chemistry in your tank crashes as this stuff has seized up the magnetic impeller in your filtration motor it becomes a problem. Good news is you can remove it all with a fridge magnet if you need to.
The above reasons are why I constantly chant "When in doubt, leave it out!" In my experience, axolotls do just as well, if not better in a bare bottomed tank.
There is a "new" option I have yet to use myself, but feel would not only look natural, it would provide all the advantages of a bare bottom tank to the axolotl keeper (and the axolotls!)
Universal Habitats (a division of Universal Rock) is an Aussie company that makes these absolutely fantastic products for vivaria use, both terrestrial and aquatic. I was lucky enough to be called in to "review" their product line for my local pet shop. I must say I am impressed! Durable, beautiful, and ultra-realistic their rocks and background/floor panels are amazing. The panels can be cut with a study scissors and custom fit to just about any tank with very little effort. The price is what has kept me from using this product. I have no clue what it sells for in other places, but the fellow at my local shop has obscenely high price tags on it.