When you buy a gas grill, it typically comes with a propane gas tank. These tanks will normally last for a good while and can be refilled whenever they become empty. After a while, the tanks might rust from exposure to the outdoors or the open-close valve might stop working properly. When this happens, it is time to get a new tank and properly dispose of the old one. You cannot just throw these tanks in the trash, however.
Make sure the gas tank is empty if possible by using the remaining contents in a normal fashion. Never open the tank and just let the gas go.
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Contact the hazardous waste facility in your area if it is not possible to use the gas because of some type of malfunction. You might also try a local propane distributor to see if it accepts partially full tanks.
Contact a dealer that operates a tank trading service. These businesses routinely trade full tanks for empty ones, so that you always have a tank that is up to government standards and fully functioning. Some larger home improvement stores also offer this service. This type of business might be willing to accept the damaged tank as long as you purchase a new one.
Contact your trash collection service to see if it has a way of disposing of this type of item. Never just throw it in the trash without checking with the company first. With municipal trash companies, doing so might result in a fine.