Before doing anything with the nipple I would say to find out from the company who sold you the lift if you are supposed to do anything with it in order for your lift to be installed. I have not yet come across a bolt on lift that required to cut it off. But to answer your question yes the nipple can be cut off... I have it cut off of my axle but I have a custom built lift kit. It is just a solid piece of steel that functions as the centering pin for the suspension when it is in stock form. What I would definitely recommend to do though in your case is only cut it as short as it has to be for your kit to clear it. And I would highly recommend to weld the spring perch on both sides to the axle to prevent it from moving and/or coming out. Just make sure that it is in the proper location before you weld it on.