General requirements to tell customers, employees, or the public when AI is being used in decisions. Here is what Arizona businesses need to know in 2026.
Arizona does not yet have a specific law for this use case, but SB 1600 — AI Consumer Protection. Proposed requirements for AI transparency in consumer-facing applications and credit decisions.
State law does not replace federal law — you must comply with both. These federal rules apply to ai disclosure nationwide:
Arizona's SB 1600 — AI Consumer Protection often includes size-based exemptions. Businesses with fewer than 25 employees may be exempt, but should verify thresholds. Always review the specific statute for employee count and revenue thresholds.
The key deadline in Arizona is January 1, 2027. The law is still developing — monitor for final rules.
Arizona penalties for AI non-compliance: Civil penalties. While enforcement is still developing, companies found non-compliant face civil penalties and potential litigation.
Federal law does not currently preempt state AI laws. Arizona's SB 1600 — AI Consumer Protection applies independently of federal rules. Federal laws like ECOA, FCRA, and HIPAA also apply alongside state law — so you must comply with both.
Best practice: document all AI systems used, conduct an internal audit, implement required disclosures, and keep records for at least 3 years. For high-risk uses like ai disclosure, consider hiring an independent third-party auditor to validate compliance.
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