<p>This paper examines how technological advancements in mobility—specifically, the rise of e-commerce—alter the landscape of tax competition. Previous studies typically present a monotonic relationship in which regions with larger populations impose higher tax rates. However, in reality, this relationship does not always hold. We develop a model of commodity tax competition with e-commerce and show that local tax rates can have a non-monotonic relationship with regional populations. To be more precise, when online shopping is available, the relationship between tax rates and population sizes follows a U-shaped curve: the region with the moderate population has the lowest tax rate, while areas with small or large populations set higher tax rates. This U-shaped relationship arises from the dual effects of e-commerce: changing tax bases and intensifying tax competition. This result holds regardless of how widespread e-commerce becomes, illustrating how the availability of virtual mobility reshapes traditional spatial competition.</p>