NEW YORK — A company that was helping smokers avoid taxes in New York City by having them roll their own cigarettes in the store has agreed to shut down after being sued by the city.

The city's Law Department announced Friday that Island Smokes would close its two shops by Feb. 1 in order to resolve a suit filed in late November.

A lawyer for the company said it would have been too expensive to fight the case.

Island Smokes was one of a number of "roll-your-own" shops that have opened up across the country in recent years.

The stores sell cigarettes at drastically reduced prices because they charge customers at a tax rate set for loose tobacco, then direct customers to machines that turn the leaves into regular cigarettes.