By StartBusinessByStatePublisher: Robert SmithResearch process
Original research · LegiScan state bill data plus the bill texts, read by hand · Last updated October 15, 2026
Data through: 2025-26 state bills and their status as of October 15, 2026 (LegiScan plus California Legislative Information for SB 947 and SB 951). New York still has an AI pricing bill on the governor’s desk, so this will change.
The short answer: States passed 156 AI laws in 2025 and 2026, in 38 states. Most of them cover government agencies, schools, elections, crimes or the big AI companies. About 32 reach ordinary businesses. For most small businesses they come down to a few habits: tell people when they’re dealing with AI, keep a person in charge of big decisions about customers and workers, and don’t let software set your prices with competitors’ data or with your customers’ personal data. The biggest ones to know are Colorado’s law starting January 1, 2027 and Texas’s TRAIGA, in force since January 1, 2026. Most of these duties fall on the business itself, which is one reason owners form a company first; see LLC cost by state. Laws are only part of the picture: AI-assisted business scams cost businesses billions in 2025.
Start with your topic
- AI chatbot laws by state: website chat, customer service bots, and companion apps.
- AI hiring laws by state: resume screeners, interview tools, and notices to applicants.
- Deepfake laws by state: fake images, voices and videos, including ads and political content.
- Algorithmic pricing and rent algorithm laws by state: rent software, surveillance pricing, and dynamic pricing.
- AI in health care laws by state: AI therapy bans and rules for small practices and clinics.
Key findings
- 1,358 state AI bills were filed in 2025-26 across all 50 states and DC. New York (171), New Jersey (140) and Illinois (92) filed the most.
- 156 became law in 38 states, after we read the enacted bills, merged House and Senate twins, dropped two that had no AI provisions, and added four the search missed. California passed the most (28, including SB 947, SB 951 and seven more AI laws signed Sept 30, 2026), then New York (10).
- 32 laws reach ordinary businesses: 30 from 2025-26 (including California SB 947 and SB 951, signed Sept 30, 2026) plus two older ones that apply now. They cluster in four areas: telling people about AI, AI in big decisions such as hiring, pricing and rent software, and health care. The rest mostly cover government, schools, elections, crimes, or large AI companies.
- Health care, chatbots and government use were the top topics for new laws (17, 14 and 14 laws).
- No federal law overrides these state laws yet. A December 2025 executive order set up a legal fight against state AI laws, and Congress has drafts, but nothing has passed.
Setting up a company to provide AI services?
If you are forming a company to deliver AI services, review filing steps, registered-agent options and ongoing obligations in the LLC setup guide. Use the state-law sections below when deciding how your service will operate.
The 32 laws that reach ordinary businesses
This is our hand-checked list of state AI laws that put duties on regular businesses, not just on government or tech giants. Each was checked against the bill text. Click the bill number for the official record.
| State | Law | Who it reaches | What it means for you | Starts |
|---|---|---|---|---|
| Colorado | SB 26-189 | Any business that uses AI or automated tools to help make big decisions about people | Post a clear notice before you use it. If someone gets a “no,” explain why within 30 days and let them fix wrong data and ask for a human review where that’s reasonable. Keep records 3 years. | Jan 1, 2027 |
| Texas | HB 149 (TRAIGA) | Anyone who builds or uses AI in Texas | Don’t use AI meant to push people to self-harm or crime, to discriminate on purpose, to violate constitutional rights, or to make sexual deepfakes of kids. Health providers must tell patients about AI use. | Jan 1, 2026 |
| Utah | SB 226 | Businesses using generative AI with customers | If a customer clearly asks whether they’re talking to AI, say so. Licensed professions (like health care or accounting) must say it up front in high-risk conversations. | May 7, 2025 |
| Maine | LD 1727 | Any business using a chatbot with customers | If a person could mistake your chatbot for a human, tell them clearly that it isn’t one. | 2025 |
| Connecticut | SB 5 (Public Act 26-15) | Employers using AI tools to hire, promote, discipline or fire | Tell applicants and workers in plain language when they’re dealing with an AI hiring tool, and give written notice before the tool helps decide about them. | Oct 1, 2027 |
| Illinois | HB 3773 (2024) | Illinois employers | Don’t use AI that discriminates in hiring, promotion or firing, don’t use ZIP codes as a stand-in for race, and tell workers when you use AI for these decisions. | Jan 1, 2026 |
| California | SB 947 (Ch. 859) | Employers of every size | Don’t rely only on an automated decision system to discipline or fire a worker. If you mainly relied on one, a person has to review it. Give the worker a written notice afterward. | July 1, 2027 |
| California | SB 951 (Ch. 860) | Employers already covered by Cal/WARN | If a mass layoff, relocation, or termination is caused in whole or in large part by AI or other automated technology, say so in the notice and include details about the jobs and the system. | Jan 1, 2027 |
| California | AB 325 | Businesses and landlords using shared pricing software | Don’t use pricing software fed with competitors’ data as part of a deal to fix prices. | Jan 1, 2026 |
| New York | S 3008 (Part X) | Businesses that price using a customer’s personal data | Show “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.” | Nov 2025 |
| New York | S 7882 | Landlords | No rent-setting software that pools other landlords’ data. | Dec 2025 |
| Connecticut | HB 8002 | Landlords | No “revenue management” software fed with other landlords’ private data. | Jan 1, 2026 |
| Connecticut | SB 4 | Retail stores, food sellers, delivery apps; online sellers | No surveillance pricing for stores and delivery apps; others must label it. | July 1, 2027 |
| Maryland | HB 895 | Large food stores and delivery apps | Can’t charge one shopper more for groceries using personal data. | Oct 1, 2026 |
| New Jersey | A 3497 | Landlords | No rent “coordinator” software or rent coordination. | July 1, 2027 |
| New Jersey | A 4085 | Grocery and household-goods sellers | No surveillance pricing; one-year pause on new electronic shelf labels. | Feb 1 / Aug 1, 2027 |
| California | AB 723 | Real estate agents and brokers | If a listing photo was digitally altered (including with AI), say so and post the original online. | Jan 1, 2026 |
| California | AB 2025 | Landlords and anyone listing a rental | Same rule for rental listings. | 2027 |
| California | SB 1050 | Any business running ads | If an ad prominently features an AI-made “synthetic performer,” disclose it clearly. | 2027 |
| New York | S 8420 | Any business running ads | Disclose AI-made synthetic performers in ads. $1,000 first violation, $5,000 after. | June 2026 |
| Illinois | HB 1806 | Therapists and mental health practices | AI can’t do therapy; admin use OK; consent to AI recording. | Aug 1, 2025 |
| Nevada | AB 406 | Mental health providers | AI can’t deliver care directly; can’t market AI as a therapist. | 2025 |
| Maine | LD 2082 | Mental health providers | Illinois-style limits. | 2026 |
| Colorado | HB 1195 | Mental health providers | Illinois-style limits plus consent to AI recording. | 2026 |
| Rhode Island | H 7349 | Mental health providers | Illinois-style limits. | 2026 |
| Vermont | H 816 | Mental health professionals | Breaking the AI rules is unprofessional conduct. | 2026 |
| Tennessee | HB 1470 | Anyone advertising AI | Can’t advertise AI as a mental health professional. | July 1, 2026 |
| Utah | HB 452 | Anyone offering a mental health chatbot | Say it’s AI, label ads, don’t sell users’ health data. | May 7, 2025 |
| California | AB 489 | Health businesses and AI sellers | AI can’t use titles that suggest a licensed health professional. | 2026 |
| California | AB 3030 (2024) | Clinics and doctors’ offices | Label unreviewed AI-written patient messages and offer a way to reach a person. | In force |
| Rhode Island | H 7538 | Health care providers | Tell patients if AI documents the visit, and review the notes. | June 22, 2026 |
| Texas | SB 1188 | Health care practitioners | Use AI in diagnosis only within your license, review AI records, tell patients. | Sept 1, 2025 |
Laws that only matter if you run your own chatbot or AI companion app
These cover companies whose product is a chat or companion app. Most exclude plain customer-service bots on a business website. They include California SB 243, Colorado HB 1263, Georgia SB 540, Hawaii SB 3001, Idaho S 1297, Iowa SF 2417, Nebraska LB 525, Oregon SB 1546, Rhode Island H 7350 and Washington HB 2225. Details are on the chatbot laws page.
Laws for big companies only
- California AB 1609 (signed September 28, 2026): bans customer-service bots posing as human and requires a path to a real person, but only for businesses with more than $500 million in revenue.
- Washington HB 1170: AI detection and labeling tools, only for generative AI providers with more than 1 million monthly users (from Feb 1, 2027).
- California SB 53 and New York’s RAISE Act (S 6953): safety rules for developers of the largest AI models.
Colorado SB 26-189: starts January 1, 2027
Colorado passed the first broad AI law in 2024. After delays, lawmakers replaced it in May 2026 with SB 26-189. It’s narrower, but it still reaches any business that uses AI or automated tools in a way that materially shapes a big decision about a person.
- Which decisions: jobs, renting or buying a home, loans and financial services, insurance, health care, education and government services.
- What you have to do: give a clear notice before you use the tool (a posted public notice counts). If someone gets a bad outcome, explain it within 30 days. Let them correct wrong data, and offer human review where that’s commercially reasonable. Keep records for 3 years.
- Vendors: the companies that make these tools must give you the information you need to comply. Ask for it.
- Enforcement: only the Attorney General, as a deceptive trade practice. You get a chance to fix problems first (until 2030). People can’t sue you under this law.
- Size: we found no small-business exemption in the text. The Attorney General’s rules are due by January 1, 2027. Watch coag.gov/ai.
Small business example: a Denver landlord who uses tenant-screening software that scores applicants would need to post a notice and explain any denial the software drove.
Texas TRAIGA (HB 149): in force since January 1, 2026
The Texas Responsible AI Governance Act is mostly a list of things no one may do with AI, plus rules for government.
- Banned for everyone: AI built or used with the intent to push people toward self-harm, violence or crime; to discriminate on purpose against a protected group (a disparate effect alone isn’t enough); to violate constitutional rights; or to make child sexual abuse material or sexual deepfakes of minors.
- Health care providers must tell patients when AI is used in their care.
- Enforcement: only the Attorney General, after a 60-day chance to fix things. Fines run $10,000 to $12,000 for a curable violation, $80,000 to $200,000 for one that can’t be cured, and $2,000 to $40,000 a day for ongoing violations.
- Sandbox: a state program lets companies test AI products with some rules relaxed.
For most small Texas businesses, TRAIGA doesn’t require paperwork. It sets limits you’d likely stay inside anyway.
The federal preemption fight
Preemption means a federal law overriding state laws. Here’s where it stands:
- July 2025: the Senate voted 99-1 to strip a 10-year ban on state AI laws from the budget bill.
- December 11, 2025: President Trump signed Executive Order 14365. It created a Justice Department AI Litigation Task Force to challenge state AI laws in court, told the Commerce Department to list “onerous” state laws within 90 days, and tied some broadband (BEAD) money to states’ AI rules. An executive order can’t wipe out a state law on its own. State laws stay in force unless a court strikes them down or Congress acts. (O’Melveny summary)
- House, June 4, 2026: a bipartisan discussion draft, the Great American AI Act (Reps. Obernolte and Trahan), would pause state laws that specifically regulate how AI models are developed, for three years. It would not block state laws on how businesses use AI, or general consumer and chatbot laws. (Roll Call, DLA Piper)
- Senate: Senators Thune, Cruz and Klobuchar have worked on a narrower draft focused on catastrophic risks. No text is public, and as of mid-September 2026 it was stalled over safety-testing language. (Nextgov)
What it means for you: follow your state’s laws. Even the drafts in Congress would leave most of the laws on this page in place.
Still waiting on a governor
- New York One Fair Price Act (surveillance pricing ban) passed in June and is waiting on Governor Hochul, who must act by December 31, 2026. See the pricing page.
Just signed in California (September 30, 2026)
- SB 947 (Chapter 859), the “No Robo Bosses” law: employers cannot rely only on AI to discipline or fire a worker. Starts July 1, 2027. See the hiring laws page.
- SB 951 (Chapter 860): when a covered mass layoff is caused by AI or automation, the Cal/WARN notice must say so and include details. Starts January 1, 2027.
- AB 1979 (Chapter 854): health care chatbots fall under California’s medical privacy law, clinicians must keep their own judgment when AI informs care, and AI can’t do clinical work that needs a license. Starts January 1, 2027. See the health care page.
- SB 503 (Chapter 857): developers and users of clinical decision support AI must look for and reduce biased results. Starts January 1, 2027.
- AB 2713 (Chapter 856) and SB 1000 (Chapter 861): rewrite the California AI Transparency Act’s content-labeling and provenance rules. SB 1000 took effect immediately; AB 2713’s platform rules start January 1, 2027.
- SB 1111 (Chapter 862): using an AI “digital replica” of someone’s voice or likeness without consent counts under California’s likeness law, and impersonation with one counts as false impersonation. Starts January 1, 2027.
- SB 1159 (Chapter 863): AI systems are not “persons” who can take part in public records, open meetings and similar government processes, and using AI to fake a real person’s participation is banned. Starts January 1, 2027.
- AB 2392 (Chapter 855): California’s public colleges must set GenAI buying standards and training (recommendations due by January 1, 2028).
What the bills and laws are about
Each bill is filed under its one main topic. Bill counts come from a keyword screen and are approximate. Law counts are after our cleanup.
| Topic | Bills filed | Laws enacted | States with a law | Our guide |
|---|---|---|---|---|
| AI in health care | 169 | 19 | 14 | Health care page |
| Schools and AI education | 121 | 12 | 9 | |
| General (definitions, other) | 112 | 6 | 5 | |
| Government use, task forces, studies | 109 | 15 | 10 | |
| Chatbots and AI companions | 105 | 14 | 11 | Chatbot page |
| Labeling AI content | 89 | 9 | 7 | |
| Pricing and rent software | 78 | 8 | 5 | Pricing page |
| Deepfakes in elections | 74 | 11 | 10 | Deepfake page |
| AI in hiring and jobs | 74 | 3 | 2 | Hiring page |
| Sexual deepfakes | 63 | 13 | 10 | Deepfake page |
| Consumer protection | 57 | 5 | 4 | |
| High-risk AI and bias (Colorado-style) | 56 | 4 | 3 | |
| Deepfake fraud and impersonation | 55 | 10 | 8 | Deepfake page |
| Police, courts, crime | 56 | 5 | 4 | |
| Digital replicas, voice and likeness | 34 | 7 | 5 | Deepfake page |
| Facial recognition | 31 | 0 | 0 | |
| Critical infrastructure | 28 | 5 | 5 | |
| Kids’ online safety | 12 | 1 | 1 | |
| Big AI model developers | 13 | 3 | 3 | |
| Insurance | 9 | 1 | 1 | |
| Copyright and ownership | 7 | 1 | 1 | |
| National security, China | 6 | 2 | 2 |
AI laws in all 50 states
Bills filed (2025-26), distinct AI laws enacted (2025-26, twins counted once) and the laws most likely to matter to a small business. “None that reach most businesses” means the state’s AI laws, if any, cover government, schools, elections or crimes.
| State | AI bills | AI laws | Key laws for businesses |
|---|---|---|---|
| Alabama | 9 | 1 | Insurer AI review limits (SB 63; health care) |
| Alaska | 2 | 0 | None that reach most businesses |
| Arizona | 15 | 1 | Deepfake rules only (deepfake) |
| Arkansas | 10 | 5 | Deepfake and likeness laws; law on who owns AI-made content (HB 1876) |
| California | 59 | 28 | Price-fixing algorithms (AB 325); altered photos in home and rental listings (AB 723, AB 2025); AI actors in ads (SB 1050); AI can’t pose as a licensed health pro (AB 489); human agent rule for big companies’ bots (AB 1609); No Robo Bosses / AI layoff notice (SB 947, SB 951, signed Sept 30, 2026; hiring); health care AI rules (AB 1979, SB 503), AI content labels (AB 2713, SB 1000), digital replicas (SB 1111), all signed Sept 30, 2026 |
| Colorado | 12 | 6 | AI in big decisions like hiring, leases, loans (SB 26-189, Jan 1, 2027); AI therapy limits (HB 1195) |
| Connecticut | 31 | 5 | AI hiring tool notices from Oct 2027 (SB 5); surveillance pricing ban for stores (SB 4); rent algorithm ban (HB 8002) |
| Delaware | 2 | 1 | None that reach most businesses |
| District of Columbia | 4 | 0 | None that reach most businesses |
| Florida | 30 | 1 | None that reach most businesses |
| Georgia | 18 | 2 | Insurer AI limits (SB 444); companion chatbot rules (chatbot) |
| Hawaii | 54 | 2 | AI companion rules (SB 3001); civil suits over harmful AI imitations of people (HB 2137) |
| Idaho | 9 | 3 | Companion chatbot rules (S 1297); deepfake image law |
| Illinois | 92 | 7 | AI therapy ban (HB 1806); AI in hiring notice and anti-bias rule (HB 3773 from 2024, in force Jan 1, 2026; hiring); claim downcoding ban from 2028 |
| Indiana | 7 | 0 | None that reach most businesses |
| Iowa | 34 | 2 | Prior authorization AI limit (HF 2635); chatbot rules (SF 2417) |
| Kansas | 7 | 1 | None that reach most businesses |
| Kentucky | 12 | 1 | State agency AI rules; election deepfakes |
| Louisiana | 24 | 7 | Deepfake laws; AI disclosure in political robocalls (deepfake) |
| Maine | 11 | 4 | Tell customers a chatbot isn’t human (LD 1727); AI therapy limits (LD 2082) |
| Maryland | 57 | 8 | Grocery surveillance pricing ban (HB 895, Oct 1, 2026); insurer AI rules (HB 820) |
| Massachusetts | 34 | 0 | None that reach most businesses |
| Michigan | 12 | 1 | Deepfake image law only (deepfake) |
| Minnesota | 37 | 0 | None that reach most businesses |
| Mississippi | 24 | 2 | None that reach most businesses |
| Missouri | 22 | 0 | None that reach most businesses |
| Montana | 7 | 5 | “Right to Compute” law and AI rules for critical infrastructure; deepfakes |
| Nebraska | 7 | 2 | Conversational AI safety rules (LB 525) |
| Nevada | 9 | 3 | AI therapy ban (AB 406) |
| New Hampshire | 7 | 0 | None that reach most businesses |
| New Jersey | 145 | 3 | Rent algorithm ban (A 3497, July 2027); grocery surveillance pricing ban (A 4085, Aug 2027); deepfake crimes |
| New Mexico | 10 | 0 | None that reach most businesses |
| New York | 171 | 10 | Label prices set with personal data (S 3008); rent algorithm ban (S 7882); AI actors in ads (S 8420); One Fair Price Act awaiting governor |
| North Carolina | 19 | 0 | None that reach most businesses |
| North Dakota | 3 | 2 | AI disclosure in political ads |
| Ohio | 17 | 0 | None that reach most businesses |
| Oklahoma | 29 | 1 | None that reach most businesses |
| Oregon | 8 | 2 | AI companion rules (SB 1546) |
| Pennsylvania | 30 | 0 | None that reach most businesses |
| Rhode Island | 25 | 4 | AI therapy limits (H 7349); tell patients about AI visit notes (H 7538); AI companion rules |
| South Carolina | 15 | 0 | None that reach most businesses |
| South Dakota | 6 | 1 | Election deepfakes |
| Tennessee | 43 | 7 | AI can’t be sold as a mental health pro (HB 1470) |
| Texas | 41 | 7 | TRAIGA: banned AI uses and health care disclosure (HB 149); AI in diagnosis rules (SB 1188) |
| Utah | 11 | 7 | Say it’s AI when a customer asks (SB 226); mental health chatbot rules (HB 452) |
| Vermont | 22 | 3 | AI therapy limits (H 816) |
| Virginia | 58 | 6 | State AI fraud complaint office; AI in schools and courts |
| Washington | 17 | 2 | Companion chatbot rules (HB 2225); AI detection tools for big AI companies (HB 1170) |
| West Virginia | 13 | 2 | Deepfake image law; state AI rules |
| Wisconsin | 15 | 0 | None that reach most businesses |
| Wyoming | 2 | 1 | Deepfake law |
What to do this year
For property managers reviewing how software handles applicants, use our property management operations guide to organize screening and owner agreements. Trade employers can use the electrical-business recruiting guide to connect the hiring checks with a practical recruiting process.
- Make a list of the AI you use. Chatbots, note-takers, hiring tools, pricing tools, ad and photo tools.
- Tell people when it’s AI. A plain line like “You’re chatting with an automated assistant” covers most chatbot rules.
- Keep a person in charge of hiring, firing, tenant, loan and patient decisions, and be ready to explain a “no.”
- Ask your vendors what data their tools use, and get it in writing, especially for pricing, rent and hiring software.
- Label AI-altered photos and AI actors in listings and ads.
- Check back. We update this page as governors sign bills.
This page is general information, not legal advice. Laws differ by state and change often. For your own situation, talk to a lawyer where you do business.
Plan your AI service company setup
Once you have defined the AI service you intend to sell, compare the filing help and ongoing costs in the LLC formation guide. Keep the relevant state-law checks in your client onboarding and project planning.
Methods and sources
- Source: LegiScan’s national bill database, 2025 and 2026 sessions, pulled October 15, 2026. We searched for AI terms (artificial intelligence, generative AI, chatbots, deepfakes, synthetic media, automated decision tools, algorithmic pricing and similar) and tagged each bill by topic with keywords.
- What we left out: resolutions, bills that mention AI only in passing, and data center bills (covered on our data center tax break tracker). Federal bills are counted separately: 307 in Congress, 1 enacted (the TAKE IT DOWN Act).
- How we cleaned the law count: The screen marked 160 state bills as enacted. We checked each enacted bill’s final text for AI provisions and dropped 2 that had none (Connecticut SB 10 and Illinois SB 3020). We counted 15 House-Senate twin pairs once (Tennessee, Rhode Island, Virginia and Maryland pass matching bills in both chambers). We added 4 laws the search missed because their titles don’t mention AI (Connecticut HB 8002, Maryland HB 895, New Jersey A 4085 and Texas SB 1188). That gave 147 laws in 38 states. Adding the nine AI laws California signed on Sept 30, 2026 (SB 947, SB 951, AB 1979, SB 503, AB 2392, AB 2713, SB 1000, SB 1159 and SB 1111) brings the total to 156. We also moved a few laws to the right topic, such as a Tennessee study bill that had been tagged as a chatbot law.
- The business list: We started from the enacted laws our screen flagged as reaching businesses, read each one, and kept only laws that put duties on ordinary businesses. We moved chatbot-app laws and big-company-only laws (like California AB 1609 and Washington HB 1170) to their own lists, dropped one that is only a study (Tennessee HB 1946), and dropped Colorado SB 25B-004, which only delayed a law that has since been replaced. We also dropped Maryland HB 820, which applies only to insurers. Illinois HB 3773 and California AB 3030 passed in 2024; we list them because they apply now.
- Cross-check: The Transparency Coalition counts 85 AI laws in 27 states in 2026 alone. By the date of each bill’s last action, we count about 73 in 26 states for 2026. The gap is mostly definitions: we leave out data center bills and bills where AI is a small part.
- Limits: Bill counts come from keywords and are approximate. A search can miss bills, and effective dates can change with later laws. This is not legal advice.
- Bill data courtesy of LegiScan (CC BY 4.0). The sorting and summaries are ours.