BY NICOLE WHITE

 Bahamian officials are proposing a special, one-time tax break for residents and business owners who suffered damages from Hurricane Michelle, the Category 2 storm that pummeled the islands last week.

 Although most of the damage was cosmetic in nature, Parliamentary Secretary Michael Smith said there was significant flooding in several neighborhoods.

 To help ease the cost of replacing water-logged property, the government is considering waiving a 40 percent tax on imported goods. The tax, levied on goods such as furniture, appliances and equipment, is the only one collected by Bahamian officials.

 ``Our prime minister [Hubert Ingraham] feels pretty strongly about this and indicated that the waiver is likely to happen soon,'' said Smith, adding that it could be finalized by the end of the week.

 Smith said residents affected by the storm will also be able to apply for emergency assistance from the government's hurricane relief fund.

 Hurricane Michelle blazed a trail of death and destruction in Honduras, Nicaragua, Cuba, Jamaica and the Bahamas.

 Final damage estimates for the Bahamas are not complete yet, but New Providence, home to the capital city of Nassau, was the hardest hit.

 Popular hotels including the Sheraton Grand and the Ocean Club on Paradise Island were forced to close for renovations after the hurricane.

 Adrian Archer, a spokesman with the Tourism Ministry, said that tourism, the No. 1 revenue producer for the 700 islands in the chain, is holding strong.

 One good bit of news: Boy band N' Sync will tape its Thanksgiving Day special at the Atlantis Resort on Paradise Island on Thursday.

 ``That [N' Sync's presence on the island] sends a message that people are still choosing this nation to do this sort of promotional activities with,'' Archer said. ``We're doing everything we can to keep the Bahamas name in the minds of consumers.''

                                    © 2001 The Miami Herald