diff --git a/src/select.js b/src/select.js
index f8906c235..42812d936 100644
--- a/src/select.js
+++ b/src/select.js
@@ -393,7 +393,7 @@
             if ( ctrl.taggingLabel === false ) {
               if ( ctrl.activeIndex < 0 ) {
                 item = ctrl.tagging.fct !== undefined ? ctrl.tagging.fct(ctrl.search) : ctrl.search;
-                if ( angular.equals( ctrl.items[0], item ) ) {
+                if (!item || angular.equals( ctrl.items[0], item ) ) {
                   return;
                 }
               } else {
@@ -412,6 +412,9 @@
                 // use tagging function if we have one
                 if ( ctrl.tagging.fct !== undefined && typeof item === 'string' ) {
                   item = ctrl.tagging.fct(ctrl.search);
+                  if (!item) {
+                    return;
+                  }
                 // if item type is 'string', apply the tagging label
                 } else if ( typeof item === 'string' ) {
                   // trim the trailing space
@@ -668,7 +671,9 @@
                 if ( ctrl.tagging.fct ) {
                   newItem = ctrl.tagging.fct( newItem );
                 }
-                ctrl.select( newItem, true);
+                if (newItem) {
+                  ctrl.select(newItem, true);
+                }
               });
             }
           }
@@ -728,11 +733,15 @@
             stashArr = stashArr.slice(1,stashArr.length);
           }
           newItem = ctrl.tagging.fct(ctrl.search);
-          newItem.isTag = true;
+          if (!newItem) {
+              return;
+          }
+
           // verify the the tag doesn't match the value of an existing item
           if ( stashArr.filter( function (origItem) { return angular.equals( origItem, ctrl.tagging.fct(ctrl.search) ); } ).length > 0 ) {
             return;
           }
+          newItem.isTag = true;
         // handle newItem string and stripping dupes in tagging string context
         } else {
           // find any tagging items already in the ctrl.items array and store them
diff --git a/test/select.spec.js b/test/select.spec.js
index 32271d606..725f562a6 100644
--- a/test/select.spec.js
+++ b/test/select.spec.js
@@ -311,6 +311,21 @@ describe('ui-select tests', function() {
     });
   });
 
+  it('should allow decline tags when tagging function returns null', function() {
+    scope.taggingFunc = function (name) {
+      return null;
+    };
+
+    var el = createUiSelect({tagging: 'taggingFunc'});
+    clickMatch(el);
+
+    $(el).scope().$select.search = 'idontexist';
+    $(el).scope().$select.activeIndex = 0;
+    $(el).scope().$select.select('idontexist');
+
+    expect($(el).scope().$select.selected).not.toBeDefined();
+  });
+
   // See when an item that evaluates to false (such as "false" or "no") is selected, the placeholder is shown https://github.com/angular-ui/ui-select/pull/32
   it('should not display the placeholder when item evaluates to false', function() {
     scope.items = ['false'];