The Vineyard Gazette has a news article on what it calls "the sudden crackdown in Tisbury on businesses flying 'open' flags." From the Gazette's account of a selectmen's meeting:
A long discussion then explored the arcane details of the rules for signs in general, and flags in particular.
A formula allows signs proportionate to the size of a business's frontage; flags are considered advertising and are included in the calculation. The formula varies according to the zoning of the area in which the business operates. But a national flag, of any size and of any nation, is exempt.
This explains why the Scottish Bakehouse — which also was told by Mr. Barwick to take down its "open" flag — now flies the flag of Scotland. And why Rocco's Pizza, in the Tisbury Marketplace, now flies the flags of Italy and the United States.
It also explains why the owners of the Little House had to get out the scissors and prune their flag to eight square feet, so it became legal....
The building inspector subsequently visited, by his best count, some 25 Tisbury businesses which had the flags.
The story, worth clicking through and reading in full if you have the time, is a little gem of the petty-bureaucrats-strangle-business-with-mindless-regulation genre.