diff --git a/homeassistant/components/tag/__init__.py b/homeassistant/components/tag/__init__.py
index 0462c5bec3488e..95efae3d386b7a 100644
--- a/homeassistant/components/tag/__init__.py
+++ b/homeassistant/components/tag/__init__.py
@@ -84,7 +84,9 @@ def _create_entry(
         original_name=f"{DEFAULT_NAME} {tag_id}",
         suggested_object_id=slugify(name) if name else tag_id,
     )
-    return entity_registry.async_update_entity(entry.entity_id, name=name)
+    if name:
+        return entity_registry.async_update_entity(entry.entity_id, name=name)
+    return entry
 
 
 class TagStore(Store[collection.SerializedStorageCollection]):
diff --git a/tests/components/tag/test_init.py b/tests/components/tag/test_init.py
index 6f309391d2b804..5c1e80c2d8bc87 100644
--- a/tests/components/tag/test_init.py
+++ b/tests/components/tag/test_init.py
@@ -294,6 +294,10 @@ async def test_entity_created_and_removed(
     assert item["id"] == "1234567890"
     assert item["name"] == "Kitchen tag"
 
+    await hass.async_block_till_done()
+    er_entity = entity_registry.async_get("tag.kitchen_tag")
+    assert er_entity.name == "Kitchen tag"
+
     entity = hass.states.get("tag.kitchen_tag")
     assert entity
     assert entity.state == STATE_UNKNOWN