Should I build the Kitchen Island on top of tile or remove?
Do it the same way your other cabinets are done so everything is the same height.

Also removing the tile is a little bit tougher than you think.  You can probably do it with an angle grinder but you risk the tile chipping badly or cracking.  Going this route will also require molding over base plate to cover flaws.  (and I almost forgot, when I have removed tile in past for things like this it was a PITA sometimes to actually make the area flat.)