Pennsylvania Becomes One of the First States to Require Labels on AI-Generated Ads, With Fines Up to $3,000

Pennsylvania has become one of the first US states to put a labeling duty on AI-generated advertising. Governor Josh Shapiro signed Senate Bill 806, the Artificial Intelligence Deceptive Advertising Act, on Thursday, October 22, tucked into a batch of 58 bills, and legislative records list it as Act 99 of 2026. The law takes effect 60 days after signing, which puts the start date around December 21.

The core obligation is narrower than a blanket label on everything a model touches. Under the enacted text, an advertiser who knowingly, recklessly or willfully produces and runs an ad in which AI-made material misleads people about what a product or service is, where it comes from, or whether it is genuine must attach a clear and conspicuous notice stating that the ad contains content modified or generated using artificial intelligence. The notice has to appear the first time the synthetic material is shown, use the same medium as that material, and, where technically feasible, be permanent or very hard to strip out.

The road to the signature was quick by statehouse standards. State Senator Nick Pisciottano, a Democrat from Allegheny County, introduced the bill in June 2025 with co-sponsors from both parties. The Senate passed it 48 to 2 on June 10, and the House followed 163 to 40 on October 7. Speaking to CBS Pittsburgh, Pisciottano said consumer groups representing older residents had described people being scammed by fake AI advertising, and argued the technology will soon make real and fabricated images hard to tell apart.

The definitions do much of the work. Synthetic content covers images, video, audio clips and text that AI has produced or substantially altered, and the act's definition of artificial intelligence explicitly includes generative systems. A disclosure only counts as clear and conspicuous if its size, contrast, placement, duration or volume make it easy to notice and understand, and it must be given in the language the consumer is using.

The carve-outs, however, are where lawyers will earn their fees. Material that is evidently fictional is exempt, as is parody, satire, commentary and criticism, and so is content limited to plain text. The Verge, which first reported the signing, flagged the obvious pressure points: what counts as significantly modified is subjective, what counts as evidently fictional is unclear, and the trigger is a false consumer perception, which raises the question of who decides what is false. Political advertising is not covered, Pisciottano told CBS Pittsburgh.

Enforcement sits with the state Attorney General and county district attorneys, who can seek injunctions and bring civil actions. Courts may impose a civil fine of no more than $3,000 per violation and award attorney fees and court costs. Notably, some early descriptions of the bill got the details wrong: several reports said plain text was covered, but the signed act exempts text-only content, and remarks by the sponsor about possible jail time have no counterpart in the enforcement section.

The reach could extend well beyond the state line. Because the labeling duty applies to ads shown in Pennsylvania regardless of where they were produced, campaigns made in New York or California that also air in Pennsylvania may need disclosures everywhere they run. That is the same extraterritorial logic that made California's privacy law a national standard, and it is why ad industry lawyers were already circulating client alerts before the ink was dry.

Whether the labels change what Pennsylvanians actually see will depend on how the Attorney General interprets the ambiguous terms, and on whether other states copy the model. A $3,000 fine cap is small change for a national brand but not for the local restaurant flying an AI-generated wings special, and consumer scams can cost victims far more than the fine suggests. The law is best read as a first test of whether labeling duties can survive contact with real ad operations, and its loopholes are as much a part of that test as its requirements.