Sift together flour, baking powder, and salt; set aside. In a large bowl, beat the butter and sugar until light in color. Add the egg and milk, and mix to combine. On low speed, gradually add the flour until the mixture pulls away from the sides of the bowl. Divide the dough in half, cover, and refrigerate for 30 minutes.
Preheat the oven to 375°F (190°C) and line two baking sheets with parchment paper. Set aside.
Sprinkle a flat working surface with powdered sugar. Working with one portion of dough at a time, sprinkle a rolling pin with powdered sugar and roll out the dough to 1/4 inch thick. Cut into desired shapes and place the sugar cookies 1 inch apart on a baking sheet.
Bake the sugar cookies for 7 to 9 minutes, or until they just begin to turn brown around the edges, rotating the cookie sheet halfway through the baking time. Let the cookies sit on the baking sheet for 2 minutes after removing them from the oven.
Let the cookies cool on a wire rack. Serve as is or decorate with cookie icing, sprinkles, or nonpareils. Store the sugar cookies in airtight containers for up to 1 week.