topic Re: LBW Tax Exempt issue for Oklahoma in Restaurant Operations

LBW Tax Exempt issue for Oklahoma

TerryBuster — Mon, 30 Mar 2026 14:31:43 GMT

Based on Oklahoma law, we cannot tax exempt LBW taxes. Toast does not have a way to do that. How are other restaurants handling this situation? I still haven't managed to come up with a viable workaround.

Re: LBW Tax Exempt issue for Oklahoma

Rob — Mon, 30 Mar 2026 17:01:54 GMT

Thanks for reaching out to the community! What if you duplicate your menu and create a separate menu/menu group for “taxed” vs. “tax-exempt” versions?

Re: LBW Tax Exempt issue for Oklahoma

Kirsten_H — Mon, 30 Mar 2026 17:12:04 GMT

Assuming LBW is liquor, beer, wine...

When we have customers who want to use tax exempt for their meals but not their LBW, we split the check and apply the tax exempt to the food bill and not the LBW. That way they have separate receipts for expense purposes as well, and usually pay for the LBW with a personal card.

Re: LBW Tax Exempt issue for Oklahoma

TerryBuster — Mon, 30 Mar 2026 17:12:56 GMT

Doesn’t help me track what I have to report to the state. Also, it’s ride with possibility for mistakes or fraud.

Re: LBW Tax Exempt issue for Oklahoma

Kirsten_H — Mon, 30 Mar 2026 17:17:45 GMT

Fair, since I'm not from OK and have no idea what your reporting requirements are. 🙂 I hope you figure out a solution.

Re: LBW Tax Exempt issue for Oklahoma

TerryBuster — Mon, 30 Mar 2026 17:24:58 GMT

That is what we are currently recommending. This does, however, incur an additional CC fee. I've got a feature request in now, hoping to get past that. This was easy in my old POS, so it caught me unawares that it wasn't a feature already.

Re: LBW Tax Exempt issue for Oklahoma

TerryBuster — Mon, 30 Mar 2026 17:26:04 GMT

I like the idea you put forth, as a workaround. It isn't clean, and requires paying attention, but it is better than using Open Items to account for the tax.

Re: LBW Tax Exempt issue for Oklahoma

ToastQuestions — Fri, 17 Apr 2026 15:31:49 GMT

Question on the splitting the check into food vs. alcohol solution, if we have a separate check with alcohol and don't make it tax exempt, the customer is still paying Oklahoma Sales Tax, which is what the tax exempt card should exempt them from. That is a valid solution to keep Oklahoma restaurants compliant with beverage tax but the customer is still paying sales tax on those beverages. This really is ripe for errors and fraud potential.

Re: LBW Tax Exempt issue for Oklahoma

TerryBuster — Fri, 17 Apr 2026 15:34:54 GMT

Indeed. And, I can't imagine we are the only state that has rules like this. That's why I was hoping for a better solution. Sounds like it is the only one that will work, currently.