I am currently deployed in Iraq and just came home for R&R. Can I reenlist here in the states and it be tax free since I am deployed?

yes, and did it myself.

Is there a regulation that covers this? I thought it was because you were in a "Combat Zone," not because you were under deployment orders. I'm not saying you are wrong. I was just wondering if it was in writing somewhere.

We were told by the retention officer here in the states that it would be taxed. This just makes no sense to me and I am looking for some written regulation etc that says it won't be taxed if done here, while I am on R&R.