In a medium bowl, sift the flour with the baking powder and salt.
Using an electric mixer, beat the butter and sugar until creamy.
Add egg and vanilla and beat until well blended.
Add flour in two batches, beating well after each addition.
Add milk and mix until just combined.
If using food coloring, divide the dough into multiple parts and add desired food coloring to each part.
Mix each colored part until food coloring is evenly incorporated. It will take a good 5 minutes of kneading by hand, but eventually the food coloring will be evenly distributed.
Wrap the dough in plastic wrap or a ziploc plastic bag and place in the refrigerator
Refrigerate the dough for at least 30 minutes. If you leave it in the refrigerator longer, you may have to wait a bit for it to be soft enough to roll out.
Preheat oven to 350 F. Line baking sheets with parchment paper. Spray lightly with cooking spray.
On a lightly floured surface, take about 1/3 of the dough. Refrigerate the rest, while you work with this portion.
Sprinkle a little flour on top of the dough.
Using a rolling pin, roll out the dough, rotating the dough after every few rolls so you get as close to a circle as possible.
Roll out until about 1/4″ thick. Dip cookie cutters in flour and cut out shapes of dough.
Place on prepared cookie sheet. Re-roll excess dough and repeat until all dough is used up.
Bake cookies for 10-15 minutes, until the cookies turn golden brown at the edges. The cookies will still feel soft.
Remove cookies from oven and leave the cookies to rest for another 5 minutes until the cookies are set and firm up.
Using a spatula, remove the cookies from the baking sheet.
Leave on a cooling rack to cool completely.
Decorate the baked cookies or enjoy as is.