The Flag Code rules are federal law. However, there are no penalties if you don't follow the code. Displaying flags in any manner you choose is protected free speech, so the code is not mandatory. Language such as 'should' and 'custom' suggest the rules to be taken more as an etiquette for flag display, rather than a law. We'd always suggest following the Flag Code guidance as laid out in section 4. Keeping good flag etiquette is the best way for you to show respect this July 4th.