diff --git a/sdk-tests/src/test/java/io/dapr/it/state/AbstractStateClientIT.java b/sdk-tests/src/test/java/io/dapr/it/state/AbstractStateClientIT.java
index e0edf102d..6a3a4c93a 100644
--- a/sdk-tests/src/test/java/io/dapr/it/state/AbstractStateClientIT.java
+++ b/sdk-tests/src/test/java/io/dapr/it/state/AbstractStateClientIT.java
@@ -74,13 +74,11 @@ public abstract class AbstractStateClientIT extends BaseIT {
     Assert.assertNotNull(state);
     Assert.assertEquals("unknownKey", state.getKey());
     Assert.assertNull(state.getValue());
-    // gRPC returns empty eTag while HTTP returns null.
-    // TODO(artursouza): https://github.com/dapr/java-sdk/issues/405
-    Assert.assertTrue(state.getEtag() == null || state.getEtag().isEmpty());
+    Assert.assertNull(state.getEtag());
   }
 
   @Test
-  public void saveAndGetBulkStates() {
+  public void saveAndGetBulkState() {
     final String stateKeyOne = UUID.randomUUID().toString();
     final String stateKeyTwo = UUID.randomUUID().toString();
     final String stateKeyThree = "NotFound";
@@ -114,8 +112,8 @@ public abstract class AbstractStateClientIT extends BaseIT {
 
     assertEquals(stateKeyThree, result.stream().skip(2).findFirst().get().getKey());
     assertNull(result.stream().skip(2).findFirst().get().getValue());
-    assertEquals("", result.stream().skip(2).findFirst().get().getEtag());
-    assertNull("not found", result.stream().skip(2).findFirst().get().getError());
+    assertNull(result.stream().skip(2).findFirst().get().getEtag());
+    assertNull(result.stream().skip(2).findFirst().get().getError());
   }
 
   @Test
diff --git a/sdk/src/main/java/io/dapr/client/DaprClientGrpc.java b/sdk/src/main/java/io/dapr/client/DaprClientGrpc.java
index 061008f3c..5e0ab7d28 100644
--- a/sdk/src/main/java/io/dapr/client/DaprClientGrpc.java
+++ b/sdk/src/main/java/io/dapr/client/DaprClientGrpc.java
@@ -320,6 +320,9 @@ public class DaprClientGrpc extends AbstractDaprClient {
     byte[] data = payload == null ? null : payload.toByteArray();
     T value = stateSerializer.deserialize(data, type);
     String etag = item.getEtag();
+    if (etag.equals("")) {
+      etag = null;
+    }
     return new State<>(value, key, etag, item.getMetadataMap(), null);
   }
 
@@ -332,6 +335,9 @@ public class DaprClientGrpc extends AbstractDaprClient {
     byte[] data = payload == null ? null : payload.toByteArray();
     T value = stateSerializer.deserialize(data, type);
     String etag = response.getEtag();
+    if (etag.equals("")) {
+      etag = null;
+    }
     return new State<>(value, requestedKey, etag, response.getMetadataMap(), stateOptions);
   }
 
diff --git a/sdk/src/main/java/io/dapr/client/DaprClientHttp.java b/sdk/src/main/java/io/dapr/client/DaprClientHttp.java
index d350e1796..2ee0d3721 100644
--- a/sdk/src/main/java/io/dapr/client/DaprClientHttp.java
+++ b/sdk/src/main/java/io/dapr/client/DaprClientHttp.java
@@ -542,6 +542,9 @@ public class DaprClientHttp extends AbstractDaprClient {
       }
 
       String etag = node.path("etag").asText();
+      if (etag.equals("")) {
+        etag = null;
+      }
       // TODO(artursouza): JSON cannot differentiate if data returned is String or byte[], it is ambiguous.
       // This is not a high priority since GRPC is the default (and recommended) client implementation.
       byte[] data = node.path("data").toString().getBytes(Properties.STRING_CHARSET.get());
diff --git a/sdk/src/test/java/io/dapr/client/DaprClientGrpcTest.java b/sdk/src/test/java/io/dapr/client/DaprClientGrpcTest.java
index e9dca3872..e437e8270 100644
--- a/sdk/src/test/java/io/dapr/client/DaprClientGrpcTest.java
+++ b/sdk/src/test/java/io/dapr/client/DaprClientGrpcTest.java
@@ -1657,6 +1657,62 @@ public class DaprClientGrpcTest {
     assertTrue(callbackDelete.wasCalled);
   }
 
+  @Test
+  public void getStateNullEtag() throws Exception {
+    String etag = null;
+    String key1 = "key1";
+    String expectedValue1 = "Expected state 1";
+    State<String> expectedState1 = buildStateKey(expectedValue1, key1, etag, new HashMap<>(), null);
+    Map<String, SettableFuture<DaprProtos.GetStateResponse>> futuresMap = new HashMap<>();
+    DaprProtos.GetStateResponse envelope = DaprProtos.GetStateResponse.newBuilder()
+            .setData(serialize(expectedValue1))
+            .build();
+    SettableFuture<DaprProtos.GetStateResponse> settableFuture = SettableFuture.create();
+    MockCallback<DaprProtos.GetStateResponse> callback = new MockCallback<>(envelope);
+    addCallback(settableFuture, callback, directExecutor());
+    settableFuture.set(envelope);
+    futuresMap.put(key1, settableFuture);
+    when(client.getState(argThat(new GetStateRequestKeyMatcher(key1)))).thenReturn(futuresMap.get(key1));
+    State<String> keyRequest1 = buildStateKey(null, key1, null, null);
+    Mono<State<String>> resultGet1 = adapter.getState(STATE_STORE_NAME, keyRequest1, String.class);
+    assertEquals(expectedState1, resultGet1.block());
+  }
+
+  @Test
+  public void getBulkStateNullEtag() throws Exception {
+    DaprProtos.GetBulkStateResponse responseEnvelope = DaprProtos.GetBulkStateResponse.newBuilder()
+            .addItems(DaprProtos.BulkStateItem.newBuilder()
+                    .setData(serialize("hello world"))
+                    .setKey("100")
+                    .build())
+            .addItems(DaprProtos.BulkStateItem.newBuilder()
+                    .setKey("200")
+                    .setEtag("")
+                    .setError("not found")
+                    .build())
+            .build();
+    SettableFuture<DaprProtos.GetBulkStateResponse> settableFuture = SettableFuture.create();
+    MockCallback<DaprProtos.GetBulkStateResponse> callback = new MockCallback<>(responseEnvelope);
+    addCallback(settableFuture, callback, directExecutor());
+    when(client.getBulkState(any(DaprProtos.GetBulkStateRequest.class)))
+            .thenAnswer(c -> {
+              settableFuture.set(responseEnvelope);
+              return settableFuture;
+            });
+    List<State<String>> result = adapter.getBulkState(STATE_STORE_NAME, Arrays.asList("100", "200"), String.class).block();
+    assertTrue(callback.wasCalled);
+
+    assertEquals(2, result.size());
+    assertEquals("100", result.stream().findFirst().get().getKey());
+    assertEquals("hello world", result.stream().findFirst().get().getValue());
+    assertNull(result.stream().findFirst().get().getEtag());
+    assertNull(result.stream().findFirst().get().getError());
+    assertEquals("200", result.stream().skip(1).findFirst().get().getKey());
+    assertNull(result.stream().skip(1).findFirst().get().getValue());
+    assertNull(result.stream().skip(1).findFirst().get().getEtag());
+    assertEquals("not found", result.stream().skip(1).findFirst().get().getError());
+  }
+
   @Test
   public void getSecrets() {
     String expectedKey = "attributeKey";
diff --git a/sdk/src/test/java/io/dapr/client/DaprClientHttpTest.java b/sdk/src/test/java/io/dapr/client/DaprClientHttpTest.java
index 3971229ea..2bddec72d 100644
--- a/sdk/src/test/java/io/dapr/client/DaprClientHttpTest.java
+++ b/sdk/src/test/java/io/dapr/client/DaprClientHttpTest.java
@@ -640,8 +640,9 @@ public class DaprClientHttpTest {
       .respond("\"" + EXPECTED_RESULT + "\"");
     daprHttp = new DaprHttp(Properties.SIDECAR_IP.get(), 3000, okHttpClient);
     daprClientHttp = new DaprClientHttp(daprHttp);
-    Mono<State<String>> monoEmptyEtag = daprClientHttp.getState(STATE_STORE_NAME, stateEmptyEtag, String.class);
-    assertEquals(monoEmptyEtag.block().getKey(), "key");
+    State<String> monoEmptyEtag = daprClientHttp.getState(STATE_STORE_NAME, stateEmptyEtag, String.class).block();
+    assertEquals(monoEmptyEtag.getKey(), "key");
+    assertNull(monoEmptyEtag.getEtag());
   }
 
   @Test
@@ -667,8 +668,9 @@ public class DaprClientHttpTest {
       .respond("\"" + EXPECTED_RESULT + "\"");
     daprHttp = new DaprHttp(Properties.SIDECAR_IP.get(), 3000, okHttpClient);
     daprClientHttp = new DaprClientHttp(daprHttp);
-    Mono<State<String>> monoNullEtag = daprClientHttp.getState(STATE_STORE_NAME, stateNullEtag, String.class);
-    assertEquals(monoNullEtag.block().getKey(), "key");
+    State<String> monoNullEtag = daprClientHttp.getState(STATE_STORE_NAME, stateNullEtag, String.class).block();
+    assertEquals(monoNullEtag.getKey(), "key");
+    assertNull(monoNullEtag.getEtag());
   }
 
   @Test