diff --git a/CRM/Tag/Form/Edit.php b/CRM/Tag/Form/Edit.php
index 8d6d94ff678f..6def792c3428 100644
--- a/CRM/Tag/Form/Edit.php
+++ b/CRM/Tag/Form/Edit.php
@@ -58,6 +58,9 @@ public function buildQuickForm() {
       }
     }
     else {
+      $parentId = NULL;
+      $isTagsetChild = FALSE;
+
       $this->_isTagSet = CRM_Utils_Request::retrieve('tagset', 'Positive', $this);
 
       if (!$this->_isTagSet &&
@@ -67,9 +70,16 @@ public function buildQuickForm() {
         $this->_isTagSet = TRUE;
       }
 
+      if ($this->_id) {
+        $parentId = CRM_Core_DAO::getFieldValue('CRM_Core_DAO_Tag', $this->_id, 'parent_id');
+        $isTagSetChild = $parentId ? CRM_Core_DAO::getFieldValue('CRM_Core_DAO_Tag', $parentId, 'is_tagset') : FALSE;
+      }
+
       if (!$this->_isTagSet) {
-        $colorTags = CRM_Core_BAO_Tag::getColorTags(NULL, TRUE, $this->_id);
-        $this->add('select2', 'parent_id', ts('Parent Tag'), $colorTags, FALSE, array('placeholder' => ts('- select -')));
+        if (!$isTagSetChild) {
+          $colorTags = CRM_Core_BAO_Tag::getColorTags(NULL, TRUE, $this->_id);
+          $this->add('select2', 'parent_id', ts('Parent Tag'), $colorTags, FALSE, array('placeholder' => ts('- select -')));
+        }
 
         // Tagsets are not selectable by definition so only include the selectable field if NOT a tagset.
         $selectable = $this->add('checkbox', 'is_selectable', ts('Selectable?'));
@@ -99,13 +109,7 @@ public function buildQuickForm() {
 
       $isReserved = $this->add('checkbox', 'is_reserved', ts('Reserved?'));
 
-      $usedFor = $this->addSelect('used_for', array('multiple' => TRUE, 'option_url' => NULL));
-
-      if ($this->_id &&
-        CRM_Core_DAO::getFieldValue('CRM_Core_DAO_Tag', $this->_id, 'parent_id')
-      ) {
-        $usedFor->freeze();
-      }
+      $this->addSelect('used_for', array('multiple' => TRUE, 'option_url' => NULL));
 
       $adminTagset = TRUE;
       if (!CRM_Core_Permission::check('administer Tagsets')) {
@@ -129,7 +133,7 @@ public function setDefaultValues() {
     if (empty($this->_id) || !CRM_Core_DAO::getFieldValue('CRM_Core_DAO_Tag', $this->_id, 'color')) {
       $defaults['color'] = '#ffffff';
     }
-    if (empty($this->_id) && $this->_isTagSet) {
+    if (empty($this->_id)) {
       $defaults['used_for'] = 'civicrm_contact';
     }
     return $defaults;
diff --git a/CRM/Tag/Page/Tag.php b/CRM/Tag/Page/Tag.php
index cd02704792fb..42327a960bcd 100644
--- a/CRM/Tag/Page/Tag.php
+++ b/CRM/Tag/Page/Tag.php
@@ -164,10 +164,12 @@ public function browse($action = NULL, $sort = NULL) {
 
     $usedFor = CRM_Core_OptionGroup::values('tag_used_for');
 
-    $query = "SELECT t1.name, t1.id, t2.name as parent, t1.description, t1.used_for, t1.is_tagset,
-                        t1.is_reserved, t1.parent_id, t1.used_for, t1.color
-                 FROM civicrm_tag t1 LEFT JOIN civicrm_tag t2 ON t1.parent_id = t2.id
-                 GROUP BY t1.parent_id, t1.id";
+    $query = " SELECT t1.name, t1.id, t2.name as parent, t1.description, t1.used_for, t1.is_tagset as is_tagset,
+                      t1.is_reserved, t1.parent_id, t1.used_for, t1.color, t2.is_tagset as is_tagset_child, t2.parent_id as grandparent_id
+               FROM civicrm_tag t1
+               LEFT JOIN civicrm_tag t2 ON t1.parent_id = t2.id
+               LEFT JOIN civicrm_tag t3 ON t2.parent_id = t3.id
+               ORDER BY CONCAT(IFNULL(t3.name, ''), IFNULL(t2.name, ''), t1.name)";
 
     $tag = CRM_Core_DAO::executeQuery($query);
     $values = array();
@@ -186,9 +188,7 @@ public function browse($action = NULL, $sort = NULL) {
         }
       }
 
-      if (!empty($used)) {
-        $values[$tag->id]['used_for'] = implode(", ", $used);
-      }
+      $values[$tag->id]['used_for'] = implode(", ", $used);
 
       $newAction = $action;
       if ($values[$tag->id]['is_reserved']) {
diff --git a/templates/CRM/Tag/Form/Edit.tpl b/templates/CRM/Tag/Form/Edit.tpl
index 4d982a765e48..46dc9725cdca 100644
--- a/templates/CRM/Tag/Form/Edit.tpl
+++ b/templates/CRM/Tag/Form/Edit.tpl
@@ -85,3 +85,17 @@
     {/if}
     <div class="crm-submit-buttons">{include file="CRM/common/formButtons.tpl" location="bottom"}</div>
 </div>
+{literal}
+<script type="text/javascript">
+  CRM.$(function($) {
+    var $form = $('form.{/literal}{$form.formClass}{literal}');
+    function toggleUsedFor() {
+      $('.crm-tag-form-block-used_for', $form).toggle(!$(this).val());
+      if ($(this).val()) {
+        $('select#used_for', $form).val('').change();
+      }
+    }
+    $('input[name=parent_id]', $form).change(toggleUsedFor).each(toggleUsedFor);
+  });
+</script>
+{/literal}
\ No newline at end of file
diff --git a/templates/CRM/Tag/Page/Tag.tpl b/templates/CRM/Tag/Page/Tag.tpl
index 5eb43910a10d..c0f418b394b4 100644
--- a/templates/CRM/Tag/Page/Tag.tpl
+++ b/templates/CRM/Tag/Page/Tag.tpl
@@ -27,146 +27,200 @@
 {capture assign=docLink}{docURL page="user/organising-your-data/groups-and-tags"}{/capture}
 
 {if $action eq 1 or $action eq 2 or $action eq 8}
-    {include file="CRM/Tag/Form/Edit.tpl"}
+  {include file="CRM/Tag/Form/Edit.tpl"}
 {else}
-<div class="crm-content-block">
+  <div class="crm-content-block">
     <div class="help">
-        {ts 1=$docLink}Tags can be assigned to any contact record, and are a convenient way to find contacts. You can create as many tags as needed to organize and segment your records.{/ts} {$docLink}
+      {ts 1=$docLink}Tags can be assigned to any contact record, and are a convenient way to find contacts. You can create as many tags as needed to organize and segment your records.{/ts} {$docLink}
     </div>
 
     {if $rows}
-        {if !($action eq 1 and $action eq 2)}
+      <div id="mainTabContainer">
+        <ul>
+          <li class="ui-corner-all crm-tab-button">
+            <a href="#tags">{ts}Tags{/ts}</a>
+          </li>
+          <li class="ui-corner-all crm-tab-button">
+            <a href="#tagsets">{ts}Tag Sets{/ts}</a>
+          </li>
+        </ul>
+        <div id="tags">
+          {if !($action eq 1 and $action eq 2)}
             <div class="crm-submit-buttons">
               <div class="action-link">
-                    {crmButton q="action=add&reset=1" id="newTag"  icon="plus-circle"}{ts}Add Tag{/ts}{/crmButton}
-                    {if $adminTagSet}
-                        {crmButton q="action=add&reset=1&tagset=1" id="newTagSet"  icon="plus-circle"}{ts}Add Tag Set{/ts}{/crmButton}
-                    {/if}
-                </div>
+                {crmButton q="action=add&reset=1" id="newTag"  icon="plus-circle"}{ts}Add Tag{/ts}{/crmButton}
+              </div>
             </div>
-        {/if}
-
-        {include file="CRM/common/jsortable.tpl"}
-        <div id="merge_tag_status"></div>
-        <div id="cat">
-            {strip}
-            <table id="options" class="display">
+          {/if}
+          {strip}
+            <table id="tags_table" class="display">
               <thead>
-                    <tr>
-                      <th>{ts}Tag{/ts}</th>
-                      <th>{ts}ID{/ts}</th>
-                      <th id="nosort">{ts}Description{/ts}</th>
-                      <th>{ts}Parent (ID){/ts}</th>
-                      <th>{ts}Used For{/ts}</th>
-                      <th>{ts}Tag set?{/ts}</th>
-                      <th>{ts}Reserved?{/ts}</th>
-                      <th></th>
-                    </tr>
-                </thead>
-                {foreach from=$rows item=row key=id }
-                <tr class="{cycle values="odd-row,even-row"} {$row.class} crm-tag crm-entity" id="tag-{$row.id}">
+              <tr>
+                <th>{ts}Tag{/ts}</th>
+                <th>{ts}ID{/ts}</th>
+                <th id="nosort">{ts}Description{/ts}</th>
+                <th>{ts}Parent (ID){/ts}</th>
+                <th>{ts}Used For{/ts}</th>
+                <th>{ts}Reserved?{/ts}</th>
+                <th></th>
+              </tr>
+              </thead>
+              {foreach from=$rows item=row key=id }
+                {if !$row.is_tagset && !$row.is_tagset_child}
+                  <tr class="{if $row.parent_id}child-row{/if} {if $row.grandparent_id}grandchild-row{/if} crm-tag crm-entity" id="tag-{$row.id}">
                     <td class="crm-tag-name crm-editable crmf-name" {if $row.color}style="background-color: {$row.color}; color: {$row.color|colorContrast};"{/if}>
                       {$row.name}
                     </td>
                     <td class="crm-tag-id">{$row.id}</td>
                     <td class="crm-tag-description crm-editable crmf-description">{$row.description} </td>
                     <td class="crm-tag-parent">{$row.parent}{if $row.parent_id} ({$row.parent_id}){/if}</td>
-              <td class="crm-tag-used_for">{$row.used_for}</td>
-                    <td class="crm-tag-is_tagset">{if $row.is_tagset}<img src="{$config->resourceBase}i/check.gif" alt="{ts}Tag Set{/ts}" />{/if}</td>
+                    <td class="crm-tag-used_for">{$row.used_for}</td>
                     <td class="crm-tag-is_reserved">{if $row.is_reserved}<img src="{$config->resourceBase}i/check.gif" alt="{ts}Reserved{/ts}" />{/if}</td>
                     <td>{$row.action|replace:'xx':$row.id}</td>
-                </tr>
-                {/foreach}
+                  </tr>
+                {/if}
+              {/foreach}
             </table>
-            {/strip}
+          {/strip}
         </div>
-        {if !($action eq 1 and $action eq 2)}
+        <div id="tagsets">
+          {if !($action eq 1 and $action eq 2) && $adminTagSet}
             <div class="crm-submit-buttons">
-                <div class="action-link">
-                    {crmButton q="action=add&reset=1" id="newTag"  icon="plus-circle"}{ts}Add Tag{/ts}{/crmButton}
-                    {if $adminTagSet}
-                        {crmButton q="action=add&reset=1&tagset=1" id="newTagSet"  icon="plus-circle"}{ts}Add Tag Set{/ts}{/crmButton}
-                    {/if}
-                </div>
+              <div class="action-link">
+                {crmButton q="action=add&reset=1&tagset=1" id="newTagSet"  icon="plus-circle"}{ts}Add Tag Set{/ts}{/crmButton}
+              </div>
             </div>
-        {/if}
+          {/if}
+          {strip}
+            <table id="tagsets_table" class="display">
+              <thead>
+              <tr>
+                <th>{ts}Tag{/ts}</th>
+                <th>{ts}ID{/ts}</th>
+                <th id="nosort">{ts}Description{/ts}</th>
+                <th>{ts}Parent (ID){/ts}</th>
+                <th>{ts}Used For{/ts}</th>
+                <th>{ts}Reserved?{/ts}</th>
+                <th></th>
+              </tr>
+              </thead>
+              {foreach from=$rows item=row key=id}
+                {if $row.is_tagset || $row.is_tagset_child}
+                  <tr class="{if $row.parent_id}child-row{/if} crm-tag crm-entity" id="tag-{$row.id}">
+                    <td class="crm-tag-name crm-editable crmf-name" {if $row.color}style="background-color: {$row.color}; color: {$row.color|colorContrast};"{/if}>
+                      {$row.name}
+                    </td>
+                    <td class="crm-tag-id">{$row.id}</td>
+                    <td class="crm-tag-description crm-editable crmf-description">{$row.description} </td>
+                    <td class="crm-tag-parent">{$row.parent}{if $row.parent_id} ({$row.parent_id}){/if}</td>
+                    <td class="crm-tag-used_for">{$row.used_for}</td>
+                    <td class="crm-tag-is_reserved">{if $row.is_reserved}<img src="{$config->resourceBase}i/check.gif" alt="{ts}Reserved{/ts}" />{/if}</td>
+                    <td>{$row.action|replace:'xx':$row.id}</td>
+                  </tr>
+                {/if}
+              {/foreach}
+            </table>
+          {/strip}
+        </div>
+      </div>
+      {if !($action eq 1 and $action eq 2)}
+        <div class="crm-submit-buttons">
+          <div class="action-link">
+            {crmButton q="action=add&reset=1" id="newTag"  icon="plus-circle"}{ts}Add Tag{/ts}{/crmButton}
+            {if $adminTagSet}
+              {crmButton q="action=add&reset=1&tagset=1" id="newTagSet"  icon="plus-circle"}{ts}Add Tag Set{/ts}{/crmButton}
+            {/if}
+          </div>
+        </div>
+      {/if}
+      <div id="merge_tag_status"></div>
+      {include file="CRM/common/jsortable.tpl"}
     {else}
-        <div class="messages status no-popup">
+      <div class="messages status no-popup">
         <div class="icon inform-icon"></div>&nbsp;
-            {capture assign=crmURL}{crmURL p='civicrm/tag' q="action=add&reset=1"}{/capture}
-            {ts 1=$crmURL}There are no Tags present. You can <a href='%1'>add one</a>.{/ts}
-        </div>
+        {capture assign=crmURL}{crmURL p='civicrm/tag' q="action=add&reset=1"}{/capture}
+        {ts 1=$crmURL}There are no Tags present. You can <a href='%1'>add one</a>.{/ts}
+      </div>
     {/if}
 
-</div>
+  </div>
 
 {literal}
-<script type="text/javascript">
-CRM.$(function($) {
-  var tag;
-  $('.merge_tag').click(function(e) {
-    tag = $(this).crmEditableEntity();
-    mergeTagDialog();
-    e.preventDefault();
-  });
+  <script type="text/javascript">
+    CRM.$(function($) {
+      var tag;
+      $('#mainTabContainer').tabs();
+      $('.merge_tag').click(function(e) {
+        tag = $(this).crmEditableEntity();
+        mergeTagDialog();
+        e.preventDefault();
+      });
 
-  function mergeTagDialog() {
-    var tagUrl = {/literal}"{crmURL p='civicrm/ajax/mergeTagList' h=0}"{literal};
-    var title = {/literal}'{ts escape="js" 1="%1"}Merge tag %1 into:{/ts}'{literal};
-    CRM.confirm({
-      title: ts(title, {1: tag.name}),
-      message: '<input name="select_merge_tag" class="big" />',
-      open: function() {
-        var dialog = this;
-        $('input[name=select_merge_tag]', dialog)
-          .crmSelect2({
-            placeholder: {/literal}'{ts escape="js"}- select tag -{/ts}'{literal},
-            minimumInputLength: 1,
-            ajax: {
-              url: tagUrl,
-              data: function(term) {
-                return {term: term, fromId: tag.id};
-              },
-              results: function(response) {
-                return {results: response};
-              }
+      function mergeTagDialog() {
+        var tagUrl = {/literal}"{crmURL p='civicrm/ajax/mergeTagList' h=0}"{literal};
+        var title = {/literal}'{ts escape="js" 1="%1"}Merge tag %1 into:{/ts}'{literal};
+        CRM.confirm({
+            title: ts(title, {1: tag.name}),
+            message: '<input name="select_merge_tag" class="big" />',
+            open: function() {
+              var dialog = this;
+              $('input[name=select_merge_tag]', dialog)
+                .crmSelect2({
+                  placeholder: {/literal}'{ts escape="js"}- select tag -{/ts}'{literal},
+                  minimumInputLength: 1,
+                  ajax: {
+                    url: tagUrl,
+                    data: function(term) {
+                      return {term: term, fromId: tag.id};
+                    },
+                    results: function(response) {
+                      return {results: response};
+                    }
+                  }
+                })
+                .change(function() {
+                  $('.messages', dialog).remove();
+                  if ($(this).val() && $(this).select2('data').warning) {
+                    $(dialog).append('<div class="messages status">{/literal}{ts escape='js'}Note: the selected tag is used by additional entities.{/ts}{literal}</div>');
+                  }
+                });
             }
           })
-          .change(function() {
-            $('.messages', dialog).remove();
-            if ($(this).val() && $(this).select2('data').warning) {
-              $(dialog).append('<div class="messages status">{/literal}{ts escape='js'}Note: the selected tag is used by additional entities.{/ts}{literal}</div>');
+          .on('dialogclose', function() {
+            $('input[name=select_merge_tag]', this).select2('destroy');
+          })
+          .on('crmConfirm:yes', function() {
+            var toId = $("input[name=select_merge_tag]", this).val();
+            if (!toId) {
+              $("input[name=select_merge_tag]", this).crmError('{/literal}{ts escape='js'}Select a tag{/ts}{literal}');
+              return false;
             }
+            var postUrl = {/literal}"{crmURL p='civicrm/ajax/mergeTags' h=0 }"{literal};
+            var data = {fromId: tag.id, toId: toId, key:{/literal}"{crmKey name='civicrm/ajax/mergeTags'}"{literal}};
+            $.ajax({
+              type: "POST",
+              url: postUrl,
+              data: data,
+              dataType: "json",
+              success: function(values) {
+                if ( values.status == true ) {
+                  $('#tag-' + toId).children('td.crm-tag-used_for').text(values.tagB_used_for);
+                  $('#tag-' + tag.id).html('<td colspan="8"><div class="status message"><div class="icon inform-icon"></div>' + values.message + '</div></td>');
+                }
+              }
+            });
           });
       }
-    })
-      .on('dialogclose', function() {
-        $('input[name=select_merge_tag]', this).select2('destroy');
-      })
-      .on('crmConfirm:yes', function() {
-        var toId = $("input[name=select_merge_tag]", this).val();
-        if (!toId) {
-          $("input[name=select_merge_tag]", this).crmError('{/literal}{ts escape='js'}Select a tag{/ts}{literal}');
-          return false;
-        }
-        var postUrl = {/literal}"{crmURL p='civicrm/ajax/mergeTags' h=0 }"{literal};
-        var data = {fromId: tag.id, toId: toId, key:{/literal}"{crmKey name='civicrm/ajax/mergeTags'}"{literal}};
-        $.ajax({
-          type: "POST",
-          url: postUrl,
-          data: data,
-          dataType: "json",
-          success: function(values) {
-            if ( values.status == true ) {
-              $('#tag-' + toId).children('td.crm-tag-used_for').text(values.tagB_used_for);
-              $('#tag-' + tag.id).html('<td colspan="8"><div class="status message"><div class="icon inform-icon"></div>' + values.message + '</div></td>');
-            }
-          }
-        });
-      });
-  }
-});
-</script>
+    });
+  </script>
+  <style type="text/css">
+    .crm-container tr.child-row td:first-child {
+      padding-left: 2em;
+    }
+    .crm-container tr.grandchild-row td:first-child {
+      padding-left: 3em;
+    }
+  </style>
 {/literal}
 
 {/if}