Yes, TAXATION is a Scrabble word!

Letter values in Scrabble US: T 1, A 1, X 8, A 1, T 1, I 1, O 1, N 1.

Is it a valid word?

TAXATION is a valid word in the official Scrabble dictionary (US), the UK Scrabble Dictionary and Words with Friends (ENABLE).

charge against a citizen's person or property or activity for the support of government
government income due to taxation
the imposition of taxes; the practice of the government in levying taxes on the subjects of a state

Also: revenue enhancement, tax income, tax revenue.