Chern-Simons contact terms constitute new
observables in three-dimensional quantum field theory. In N=2 supersymmetric
theories with an R-symmetry, they lead to a superconformal anomaly. This
understanding clarifies several puzzles surrounding the S3 partition function
of these theories. In particular, it leads to a proof of the F-maximization
principle.  Chern-Simons contact terms
can be computed exactly using localization and lead to new tests of proposed
dualities.