We go through a couple flags a year here in AZ. When they become tattered and sun bleached, we pull them down and then fold and burn right in our own front yard. The EPA can kiss my a$$!

I've always thought the property way to decommission a flag was to burn it. 

Val Evans is right on all points made!!!!  good woman...

https://www.vfw.org/Flag/

Many donate their Flags for use at Veterans Burials. When I was a youngster, it was my understanding that burning the Flag in private was considered acceptable. Now with burning restrictions, I believe the former is the best way.

John DL Arendsen great answers - did not know about it. Thanks for asking.

From the VFW:  

FLAG DISPOSAL:

1. The flag should be folded in its customary manner. 
2. It is important that the fire be fairly large and of sufficient intensity to ensure complete burning of the flag.
3. Place the flag on the fire.
4. The individual(s) can come to attention, salute the flag, recite the Pledge of Allegiance and have a brief period of silent reflection.
5. After the flag is completely consumed, the fire should then be safely extinguished and the ashes buried.
6. Please make sure you are conforming to local/state fire codes or ordinances.

There are places that will do this.  I suggest you google search this and find a place local to your area. 

John,

I saw it on TV also.  A

Donate it to your local Boy Scout Troop or Cub Scout pack! :) We are always accepting and seeking out flags for flag retirement ceremonies. The leaders teach the boys how to properly burn the flag. The ashes are then scooped out and given a burial and the grommets are given to the Scouts that participate in the ceremonies (which are prized as that is the only "acceptable" way to get flag grommets). 

I was curious about this myself - thanks for asking and thanks to all the great answers. Now I know.

The local VFW has offered that service to the community. I don't know if you mail it , door drop or stop by when the bar is open.

However, burning the flag, properly folded, via a robust fire is the accepted method.

Members of our local VFW will come pick up your flag or take it down for you and properly depose of it. They are who I call.

When in doubt call the Boy Scouts, they know the proper and dignified ways to retire them.

Boy scouts, girl scouts, VFW and I *THINK* the elks lodge.  Read something recently on the places to do it.  Always knew about boy scouts, never knew the girl scouts did it too.

Thank you Marc Swartz, CPA, CA, Real Estate Broker 

Ask a vet. 

As others have mentioned, Boy Scouts offer this service.

I'll go with Gabe Saunders explanation. It is complete! Thanks Gabe!

They should be burned.

Marc Swartz, CPA, CA, Real Estate Broker has the link

There were lots of news artices on the procedure for Flag Day.

I love Marc Swartz, CPA, CA, Real Estate Broker commented..Google it!

Lots of good answers here, and agree with Val as to what the epa can do.

Burn it or we can turn it into a depository like recycling at our city hall.