diff --git a/.changeset/funny-pianos-grow.md b/.changeset/funny-pianos-grow.md
new file mode 100644
index 0000000000..7823ca82b0
--- /dev/null
+++ b/.changeset/funny-pianos-grow.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-catalog-react': patch
+---
+
+Fixed bug in `EntityTagPicker` that filtered on unavailable tags for the selected kind.
diff --git a/plugins/catalog-react/src/components/EntityTagPicker/EntityTagPicker.test.tsx b/plugins/catalog-react/src/components/EntityTagPicker/EntityTagPicker.test.tsx
index 7da357d806..de7bbb89be 100644
--- a/plugins/catalog-react/src/components/EntityTagPicker/EntityTagPicker.test.tsx
+++ b/plugins/catalog-react/src/components/EntityTagPicker/EntityTagPicker.test.tsx
@@ -202,4 +202,33 @@ describe('<EntityTagPicker/>', () => {
       tags: new EntityTagFilter(['tag2']),
     });
   });
+  it('removes tags from filters if there are none available', async () => {
+    const updateFilters = jest.fn();
+    const mockCatalogApiRefNoTags = {
+      getEntityFacets: async () => ({
+        facets: {
+          'metadata.tags': {},
+        },
+      }),
+    } as unknown as CatalogApi;
+
+    render(
+      <TestApiProvider apis={[[catalogApiRef, mockCatalogApiRefNoTags]]}>
+        <MockEntityListContextProvider
+          value={{
+            updateFilters,
+            queryParameters: { tags: ['tag1'] },
+          }}
+        >
+          <EntityTagPicker />
+        </MockEntityListContextProvider>
+        ,
+      </TestApiProvider>,
+    );
+    await waitFor(() =>
+      expect(updateFilters).toHaveBeenLastCalledWith({
+        tags: undefined,
+      }),
+    );
+  });
 });
diff --git a/plugins/catalog-react/src/components/EntityTagPicker/EntityTagPicker.tsx b/plugins/catalog-react/src/components/EntityTagPicker/EntityTagPicker.tsx
index 25f02e8adc..4a1dc03e96 100644
--- a/plugins/catalog-react/src/components/EntityTagPicker/EntityTagPicker.tsx
+++ b/plugins/catalog-react/src/components/EntityTagPicker/EntityTagPicker.tsx
@@ -93,10 +93,14 @@ export const EntityTagPicker = (props: EntityTagPickerProps) => {
   }, [queryParamTags]);
 
   useEffect(() => {
+    const tags = Object.keys(availableTags ?? {});
     updateFilters({
-      tags: selectedTags.length ? new EntityTagFilter(selectedTags) : undefined,
+      tags:
+        selectedTags.length && tags.length
+          ? new EntityTagFilter(selectedTags)
+          : undefined,
     });
-  }, [selectedTags, updateFilters]);
+  }, [selectedTags, updateFilters, availableTags]);
 
   if (!Object.keys(availableTags ?? {}).length) return null;