Step 1: Preheat oven to 350°F (175°C) and line baking sheets with parchment paper.
Step 2: In a medium bowl, whisk together flour, baking powder, baking soda, and salt.
Step 3: In a large bowl, cream together butter and sugar until light and fluffy.
Step 4: Beat in eggs one at a time, then mix in vanilla extract.
Step 5: Alternately add flour mixture and sour cream to the butter mixture, mixing until just combined.
Step 6: Drop rounded tablespoons of dough onto prepared baking sheets, spacing them 2 inches apart.
Step 7: Bake for 10-12 minutes until edges are lightly golden and centers are set.
Step 8: Let cookies cool on baking sheets for 5 minutes, then transfer to wire racks to cool completely.
Step 9: For the frosting, beat butter until creamy, then gradually add powdered sugar.
Step 10: Mix in milk and vanilla until smooth, adding food coloring if desired.
Step 11: Frost cooled cookies and decorate with sprinkles immediately.
Step 12: Let frosting set for 30 minutes before serving or storing.