In a large bowl, combine sugar, butter, milk, vanilla, egg and blend well.
Add flour, baking powder, salt and mix well.
Cover with plastic wrap and refrigerate for at least 1 hour.
Heat oven to 400 degrees.
On a lightly floured surface roll out 1/3 of the dough at a time to a 1/8" thickness. (Keep remaining dough refrigerated.)
Cut with floured cookie cutter and place about 1" apart on ungreased cookie sheet.
Bake at 400 degrees for about 5-9 minutes or until edges are light brown. Immediately remove from cookie sheets.
Once cookies are cooled completely, spread frosting on top of cookies and sprinkle with colored sugar or sprinkles.
Makes about 6 dozen. Enjoy!