A novel compact RFID tag employing open stubs in a microstrip transmission line is proposed. The prototype of the tag is fabricated on a substrate of dielectric constant 4.4 and loss tangent 0.0018. The tag consists of microstrip open stub resonators and cross polarized transmitting and receiving disc monopole antennas. A prototype of 8 bit data encoded tag is demonstrated in this communication. Method for enhancing the performance of the RFID tag is also proposed. Magnitude or group delay response can be used to decode the tag informations.