You can use the [remove_submenu_page][1] function after registering the taxonomy. Let's say your custom taxonomy is 'location', you would write something like this:

    function remove_custom_tax_wp_menu() {
      $page = remove_submenu_page( 'edit.php', 'edit-tags.php?taxonomy=location' );
      /* See reference: http://codex.wordpress.org/remove_submenu_page#Examples */
    }

  [1]: http://codex.wordpress.org/remove_submenu_page#Examples

It should only affect the dashboard sidebar and not the metabox within your custom post types. Hope it helps!