Preheat the oven to 350°F (175°C). Line a 9×13 inch baking pan with parchment paper, leaving an overhang on the sides for easy removal.
In a medium bowl, whisk together the all-purpose flour, baking powder, and salt. Set aside.
In a large bowl, beat the softened unsalted butter and granulated sugar together with an electric mixer on medium speed until light and fluffy, about 3 minutes.
Add the egg and vanilla extract to the butter mixture and beat until combined.
Gradually add the dry ingredients to the wet ingredients, alternating with the whole milk, beginning and ending with the dry ingredients. Mix until just combined.
Spread the cookie dough evenly into the prepared baking pan and smooth the top with a spatula.
Bake for 22 to 25 minutes, or until the edges are lightly golden and a toothpick inserted into the center comes out clean.
Remove the pan from the oven and allow the cookie bars to cool completely in the pan on a wire rack.
Once cooled, spread the white vanilla frosting evenly over the top of the cookie bars.
Sprinkle the red sanding sugar on one third of the frosted bars, the blue sanding sugar on another third, and leave the remaining third plain to represent the colors of the American flag.
Use the parchment paper overhang to lift the bars out of the pan and cut into 16 equal squares.
Serve and enjoy your festive 4th of July Sugar Cookie Bars!