The costs of sales and use tax compliance are high for US businesses and depend on the size of a company and the number of states in or to which they make sales. Taxpayers and Revenue Services do not only have a common interest in reducing tax administration and compliance complexity and the costs associated with it, they have also found solutions in the form of sales and use tax managed compliance agreements (MCAs) and managed audit agreements (MAAs). This article explores the operation of these contracts, outlining their perceived characteristics, benefits and costs, and addressing a number of policy and administrative issues, as well as the essential elements of them.