diff --git a/app/assets/javascripts/app.ts b/app/assets/javascripts/app.ts
index eead8b4e8..5680c8704 100644
--- a/app/assets/javascripts/app.ts
+++ b/app/assets/javascripts/app.ts
@@ -64,7 +64,7 @@ import { MultipleSelectedNotesDirective } from './components/MultipleSelectedNot
 import { NotesContextMenuDirective } from './components/NotesContextMenu';
 import { NotesOptionsPanelDirective } from './components/NotesOptionsPanel';
 import { IconDirective } from './components/Icon';
-import { NoteTagsDirective } from './components/NoteTags';
+import { NoteTagsContainerDirective } from './components/NoteTagsContainer';
 
 function reloadHiddenFirefoxTab(): boolean {
   /**
@@ -159,7 +159,7 @@ const startApplication: StartApplication = async function startApplication(
     .directive('notesContextMenu', NotesContextMenuDirective)
     .directive('notesOptionsPanel', NotesOptionsPanelDirective)
     .directive('icon', IconDirective)
-    .directive('noteTags', NoteTagsDirective);
+    .directive('noteTagsContainer', NoteTagsContainerDirective);
 
   // Filters
   angular.module('app').filter('trusted', ['$sce', trusted]);
diff --git a/app/assets/javascripts/components/NoteTag.tsx b/app/assets/javascripts/components/NoteTag.tsx
new file mode 100644
index 000000000..f3f5a0d8d
--- /dev/null
+++ b/app/assets/javascripts/components/NoteTag.tsx
@@ -0,0 +1,91 @@
+import { Icon } from './Icon';
+import { FunctionalComponent, RefObject } from 'preact';
+import { useRef, useState } from 'preact/hooks';
+import { AppState } from '@/ui_models/app_state';
+import { SNTag } from '@standardnotes/snjs/dist/@types';
+
+type Props = {
+  appState: AppState;
+  index: number;
+  tagsRef: RefObject<HTMLButtonElement[]>;
+  tag: SNTag;
+  overflowed: boolean;
+  maxWidth: number | 'auto';
+};
+
+export const NoteTag: FunctionalComponent<Props> = ({
+  appState,
+  index,
+  tagsRef,
+  tag,
+  overflowed,
+  maxWidth,
+}) => {
+  const [showDeleteButton, setShowDeleteButton] = useState(false);
+  const deleteTagRef = useRef<HTMLButtonElement>();
+
+  const deleteTag = async () => {
+    await appState.activeNote.removeTagFromActiveNote(tag);
+
+    if (index > 0 && tagsRef.current) {
+      tagsRef.current[index - 1].focus();
+    }
+  };
+
+  const onTagClick = () => {
+    appState.setSelectedTag(tag);
+  };
+
+  const onFocus = () => {
+    appState.activeNote.setTagFocused(true);
+    setShowDeleteButton(true);
+  };
+
+  const onBlur = (event: FocusEvent) => {
+    appState.activeNote.setTagFocused(false);
+    if ((event.relatedTarget as Node) !== deleteTagRef.current) {
+      setShowDeleteButton(false);
+    }
+  };
+
+  return (
+    <button
+      ref={(element) => {
+        if (element && tagsRef.current) {
+          tagsRef.current[index] = element;
+        }
+      }}
+      className="sn-tag pl-1 pr-2 mr-2"
+      style={{ maxWidth }}
+      onClick={onTagClick}
+      onKeyUp={(event) => {
+        if (event.key === 'Backspace') {
+          deleteTag();
+        }
+      }}
+      tabIndex={overflowed ? -1 : 0}
+      onFocus={onFocus}
+      onBlur={onBlur}
+    >
+      <Icon type="hashtag" className="sn-icon--small color-neutral mr-1" />
+      <span className="whitespace-nowrap overflow-hidden overflow-ellipsis">
+        {tag.title}
+      </span>
+      {showDeleteButton && (
+        <button
+          ref={deleteTagRef}
+          type="button"
+          className="ml-2 -mr-1 border-0 p-0 bg-transparent cursor-pointer flex"
+          onFocus={onFocus}
+          onBlur={onBlur}
+          onClick={deleteTag}
+        >
+          <Icon
+            type="close"
+            className="sn-icon--small color-neutral hover:color-info"
+          />
+        </button>
+      )}
+    </button>
+  );
+};
diff --git a/app/assets/javascripts/components/NoteTags.tsx b/app/assets/javascripts/components/NoteTagsContainer.tsx
similarity index 69%
rename from app/assets/javascripts/components/NoteTags.tsx
rename to app/assets/javascripts/components/NoteTagsContainer.tsx
index 5effdac7c..0b5724417 100644
--- a/app/assets/javascripts/components/NoteTags.tsx
+++ b/app/assets/javascripts/components/NoteTagsContainer.tsx
@@ -1,18 +1,18 @@
 import { AppState } from '@/ui_models/app_state';
 import { observer } from 'mobx-react-lite';
 import { toDirective, useCloseOnClickOutside } from './utils';
-import { Icon } from './Icon';
 import { AutocompleteTagInput } from './AutocompleteTagInput';
 import { WebApplication } from '@/ui_models/application';
 import { useCallback, useEffect, useRef, useState } from 'preact/hooks';
 import { SNTag } from '@standardnotes/snjs';
+import { NoteTag } from './NoteTag';
 
 type Props = {
   application: WebApplication;
   appState: AppState;
 };
 
-const NoteTags = observer(({ application, appState }: Props) => {
+const NoteTagsContainer = observer(({ application, appState }: Props) => {
   const {
     overflowedTagsCount,
     tags,
@@ -29,31 +29,15 @@ const NoteTags = observer(({ application, appState }: Props) => {
   const containerRef = useRef<HTMLDivElement>();
   const tagsContainerRef = useRef<HTMLDivElement>();
   const tagsRef = useRef<HTMLButtonElement[]>([]);
-  const overflowButtonRef = useRef<HTMLButtonElement>();
 
   tagsRef.current = [];
 
   useCloseOnClickOutside(tagsContainerRef, (expanded: boolean) => {
-    if (overflowButtonRef.current || tagsContainerExpanded) {
+    if (tagsContainerExpanded) {
       appState.activeNote.setTagsContainerExpanded(expanded);
     }
   });
 
-  const onTagBackspacePress = async (tag: SNTag, index: number) => {
-    await appState.activeNote.removeTagFromActiveNote(tag);
-
-    if (index > 0) {
-      tagsRef.current[index - 1].focus();
-    }
-  };
-
-  const onTagClick = (clickedTag: SNTag) => {
-    const tagIndex = tags.findIndex((tag) => tag.uuid === clickedTag.uuid);
-    if (tagsRef.current[tagIndex] === document.activeElement) {
-      appState.setSelectedTag(clickedTag);
-    }
-  };
-
   const isTagOverflowed = useCallback(
     (tagElement?: HTMLButtonElement): boolean | undefined => {
       if (!tagElement) {
@@ -144,10 +128,7 @@ const NoteTags = observer(({ application, appState }: Props) => {
         tagResizeObserver.disconnect();
       }
     };
-  }, [reloadTagsContainerLayout, tags]);
-
-  const tagClass = `h-6 bg-contrast border-0 rounded text-xs color-text py-1 pr-2 flex items-center 
-    mt-2 cursor-pointer hover:bg-secondary-contrast focus:bg-secondary-contrast`;
+  }, [reloadTagsContainerLayout]);
 
   return (
     <div
@@ -164,38 +145,18 @@ const NoteTags = observer(({ application, appState }: Props) => {
           maxWidth: tagsContainerMaxWidth,
         }}
       >
-        {tags.map((tag: SNTag, index: number) => {
-          const overflowed =
-            !tagsContainerExpanded &&
-            lastVisibleTagIndex &&
-            index > lastVisibleTagIndex;    
-          return (
-            <button
-              className={`${tagClass} pl-1 mr-2`}
-              style={{ maxWidth: tagsContainerMaxWidth }}
-              ref={(element) => {
-                if (element) {
-                  tagsRef.current[index] = element;
-                }
-              }}
-              onClick={() => onTagClick(tag)}
-              onKeyUp={(event) => {
-                if (event.key === 'Backspace') {
-                  onTagBackspacePress(tag, index);
-                }
-              }}
-              tabIndex={overflowed ? -1 : 0}
-            >
-              <Icon
-                type="hashtag"
-                className="sn-icon--small color-neutral mr-1"
-              />
-              <span className="whitespace-nowrap overflow-hidden overflow-ellipsis">
-                {tag.title}
-              </span>
-            </button>
-          );
-        })}
+        {tags.map((tag: SNTag, index: number) => (
+          <NoteTag
+            appState={appState}
+            tagsRef={tagsRef}
+            index={index}
+            tag={tag}
+            maxWidth={tagsContainerMaxWidth}
+            overflowed={!tagsContainerExpanded &&
+              !!lastVisibleTagIndex &&
+              index > lastVisibleTagIndex}
+          />
+        ))}
         <AutocompleteTagInput
           application={application}
           appState={appState}
@@ -205,9 +166,8 @@ const NoteTags = observer(({ application, appState }: Props) => {
       </div>
       {tagsOverflowed && (
         <button
-          ref={overflowButtonRef}
           type="button"
-          className={`${tagClass} pl-2 ml-1 absolute`}
+          className="sn-tag ml-1 px-2 absolute"
           onClick={expandTags}
           style={{ left: overflowCountPosition }}
         >
@@ -218,4 +178,4 @@ const NoteTags = observer(({ application, appState }: Props) => {
   );
 });
 
-export const NoteTagsDirective = toDirective<Props>(NoteTags);
+export const NoteTagsContainerDirective = toDirective<Props>(NoteTagsContainer);
diff --git a/app/assets/javascripts/ui_models/app_state/active_note_state.ts b/app/assets/javascripts/ui_models/app_state/active_note_state.ts
index f853f7fa6..e987d3a9b 100644
--- a/app/assets/javascripts/ui_models/app_state/active_note_state.ts
+++ b/app/assets/javascripts/ui_models/app_state/active_note_state.ts
@@ -17,6 +17,7 @@ export class ActiveNoteState {
   tagsContainerMaxWidth: number | 'auto' = 0;
   tagsContainerExpanded = false;
   overflowedTagsCount = 0;
+  tagFocused = false;
 
   constructor(
     private application: WebApplication,
@@ -28,12 +29,14 @@ export class ActiveNoteState {
       tagsContainerMaxWidth: observable,
       tagsContainerExpanded: observable,
       overflowedTagsCount: observable,
+      tagFocused: observable,
 
       tagsOverflowed: computed,
       
       setTagsContainerMaxWidth: action,
       setTagsContainerExpanded: action,
       setOverflowedTagsCount: action,
+      setTagFocused: action,
       reloadTags: action,
     });
 
@@ -67,6 +70,10 @@ export class ActiveNoteState {
     this.overflowedTagsCount = count;
   }
 
+  setTagFocused(focused: boolean): void {
+    this.tagFocused = focused;
+  }
+
   reloadTags(): void {
     const { activeNote } = this;
     if (activeNote) {
@@ -79,13 +86,14 @@ export class ActiveNoteState {
     const defaultFontSize = window.getComputedStyle(
       document.documentElement
     ).fontSize;
-    const containerMargins = parseFloat(defaultFontSize) * 4;
+    const containerMargins = parseFloat(defaultFontSize) * 6;
+    const deleteButtonMargin = this.tagFocused ? parseFloat(defaultFontSize) * 1.25 : 0;
     const editorWidth =
       document.getElementById(EDITOR_ELEMENT_ID)?.clientWidth;
 
     if (editorWidth) {
       this.appState.activeNote.setTagsContainerMaxWidth(
-        editorWidth - containerMargins
+        editorWidth - containerMargins + deleteButtonMargin
       );
     }
   }
diff --git a/app/assets/javascripts/views/editor/editor-view.pug b/app/assets/javascripts/views/editor/editor-view.pug
index 11c55c533..aa94ead28 100644
--- a/app/assets/javascripts/views/editor/editor-view.pug
+++ b/app/assets/javascripts/views/editor/editor-view.pug
@@ -52,7 +52,7 @@
             app-state='self.appState',
             ng-if='self.appState.notes.selectedNotesCount > 0'
           )
-      note-tags(
+      note-tags-container(
         application='self.application'
         app-state='self.appState'
       )
diff --git a/app/assets/stylesheets/_sn.scss b/app/assets/stylesheets/_sn.scss
index b6d7e68d7..8f691256a 100644
--- a/app/assets/stylesheets/_sn.scss
+++ b/app/assets/stylesheets/_sn.scss
@@ -69,6 +69,10 @@
   margin-left: -0.25rem;
 }
 
+.-mr-1 {
+  margin-right: -0.25rem;
+}
+
 .py-1 {
   padding-top: 0.25rem;
   padding-bottom: 0.25rem;
@@ -82,6 +86,16 @@
   padding-right: 0.5rem;
 }
 
+.px-1 {
+  padding-left: 0.25rem;
+  padding-right: 0.25rem;
+}
+
+.px-2 {
+  padding-left: 0.5rem;
+  padding-right: 0.5rem;
+}
+
 .py-1\.5 {
   padding-top: 0.375rem;
   padding-bottom: 0.375rem;
@@ -407,3 +421,21 @@
     @extend .py-2;
   }
 }
+
+.sn-tag {
+  @extend .h-6;
+  @extend .bg-contrast;
+  @extend .border-0;
+  @extend .rounded;
+  @extend .text-xs;
+  @extend .color-text;
+  @extend .py-1;
+  @extend .py-2;
+  @extend .pr-2;
+  @extend .flex;
+  @extend .items-center;
+  @extend .mt-2;
+  @extend .cursor-pointer;
+  @extend .hover\:bg-secondary-contrast;
+  @extend .focus\:bg-secondary-contrast;
+}