The Flag is a very important symbol to the Legion and it's members, as such, we like to provide information on proper Flag Etiquette.
If you wish you can read the Flag Code.

Flag Care & Respect:
The Flag should always be displayed in a proper and dignified manner.
The Flag should not be displayed upside down, as it is used as a signal of dire distress.
The Flag should never touch anything beneath it, such as the ground, the floor, water, or merchandise.
The Flag should never be carried flat or horizontaly, it should be aloft and free.
The Flag should never have any mark, insignia, letter, word, figure, design, picture, or drawing of any nature placed upon it or any part of it.
The Flag should never be used for any advertising purpose.
The Flag should not be used as part of a costume or athletic uniform, except that a flag patch may be used on the uniform of military personnel, fireman, policeman and members of patriotic organizations.
No other flag ever should be placed above it.
Ordinarily it should be displayed only between sunrise and sunset. It should be illuminated if displayed at night.
The flag of the United States of America is saluted as it is hoisted and lowered.
When a flag is so worn it is no longer fit to serve as a symbol of our country, it should be destroyed by burning in a dignified manner.

Most American Legion Posts regularly conduct a dignified flag burning ceremony, often on Flag Day, June 14th.
Many Cub Scout Packs, Boy Scout Troops, and Girl Scout Troops retire flags regularly as well.

For more information you can go to:
The National American Legion website
USFlag.org