ANSWER:
A U.S. flag should be retired when it is ripped, faded, frayed or otherwise unserviceable as an emblem of the country. Though U.S. Code does not provide specific details on methods of destroying unserviceable flags, the American Legion developed its own ceremony to destroy flags respectfully through burning.
Some chapters of the American Legion, VFW, Boy Scouts and Girl Scouts accept public donations of damaged flags for retirement ceremonies.
VFW Post 541 - Prescott , Az. - contact # 928-776-1125
VFW Post 10227 - Prescott Valley, Az. - contact # 928-759-0095
The VFW will accept and properly dispose of your retired American Flag! We should always treat this symbol of our American Freedom with proper respect.