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1. In medium mixing bowl combine flour, baking powder, and salt; set aside. In large mixing bowl beat butter on medium to high speed for 30 seconds. Add sugar. Beat until combined, scraping sides of bowl as necessary. Beat in egg, milk, vanilla, and lemon peel. Beat in as much flour as you can with the mixer. Stir in any remaining flour. Divide dough in half. Cover and chill 1 hour or until easy to handle.
2. Preheat oven to 375 degrees F. Roll half the dough at a time, between sheets of waxed paper, to 1/4-inch thickness, sprinkling bottom sheet of waxed paper with flour if cookie dough sticks. Cut with desired cutters (if dough becomes too soft, return to refrigerator). Place 1 inch apart on ungreased cookie sheets. Bake for 8 to 10 minutes or until edges are firm and bottoms are barely light brown. Transfer to wire rack to cool. Makes about 2-1/2 dozen (2-1/2- to 3-1/2-inch) cookies.