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Arizona Law appears to support parents opting their children out of the state standardized test. The applicable statute can be in found in Title 15 of the Arizona revised statutes; specifically ยง15-102 cl. A, para. 3:

15-102. Parental involvement in the school; definition
A. The governing board, in consultation with parents, teachers and administrators, shall develop and adopt a policy to promote the involvement of parents and guardians of children enrolled in the schools within the school district, including:
1. A plan for parent participation in the schools which is designed to improve parent and teacher cooperation in such areas as homework, attendance and discipline.
2. Procedures by which parents may learn about the course of study for their children and review learning materials, including the source of any supplemental educational materials.
3. Procedures by which parents who object to any learning material or activity on the basis that it is harmful may withdraw their children from the activity or from the class or program in which the material is used. Objection to a learning material or activity on the basis that it is harmful includes objection to a material or activity because it questions beliefs or practices in sex, morality or religion.

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The Statute has several other aspects that pertain to parental rights regrading education, but this portion is relevant to opting out of the standardized testing.