We compute the equivariant index of the twisted horizontal Dolbeault operator on compact toric contact manifolds of Reeb type. The operator is elliptic transverse to the Reeb foliation and its equivariant index defines a distribution on the torus. Using the good cone condition, we show that the symbol localises to the closed Reeb orbits corresponding to the edges of the moment cone and obtain an Atiyah-Bott-Lefschetz type formula for the index. For the horizontal Dolbeault operator, we obtain an expression for the index as a sum over the lattice points of the moment cone, by applying an adaptation of the Lawrence-Varchenko polytope decomposition to rational polyhedral cones.