If you're going to break the law, why go to the trouble of forming a Delaware LLC? Won't that draw more attention to the operation and result in double taxation? Doesn't it also mean breaking Delaware law by forming a corporation for illegal purposes? Title 8, Chapter 1 says "A corporation may be incorporated or organized under this chapter to conduct or promote any lawful business or purposes..."
Furthermore, he takes all these steps to avoid 15% hotel tax, but pays 30% on the LLC profits and then pays income tax when he takes earnings from the LLC?
No you're not. It's another arbitrage play. He's creating the LLCs to cap his legal liability for each rental unit while at the same time trying to get the benefit of pass-through taxation benefits (meaning, no corporate level income tax but also meaning that all of his income is subject to gross taxation).
In practice, it probably wouldn't work. LLCs are subject to a lower veil-piercing threshold in New York than corporations are (though the requirements are otherwise generally the same), so the LLC will do little to protect him legally, especially since he's violating Delaware's laws regarding the formation of the LLC.
He's also most likely using this structure avoid attracting unwanted attention, since one of NYC's avenues for tracking down AirBnB offenders has been to compare corporate filings with rentals offered on the site.
The LLC can be taxed as a pass-through/partnership... meaning no double-taxation. Any income taxes are only on net income, while I believe the hotel tax is on gross revenues.
Furthermore, he takes all these steps to avoid 15% hotel tax, but pays 30% on the LLC profits and then pays income tax when he takes earnings from the LLC?
Am I missing something here?