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, using an electric mixer, beat the softened butter and granulated sugar on medium speed until light and fluffy, about 3 minutes.
Add the egg and 2 teaspoons vanilla extract to the butter mixture and beat until combined.
Gradually add the flour mixture to the wet ingredients, mixing on low speed until just combined. Do not overmix.
Press the cookie dough evenly into the prepared baking pan, smoothing the surface 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 from the oven and allow the cookie bars to cool completely in the pan on a wire rack.
While the bars cool, prepare the glaze by whisking together the powdered sugar, milk, and 1/2 teaspoon vanilla extract in a small bowl until smooth.
Once the cookie bars have cooled, drizzle the glaze evenly over the top.
Immediately sprinkle the red sanding sugar on one-third of the bars, the white nonpareils on the middle third, and the blue sanding sugar on the remaining third to create a patriotic design.
Allow the glaze to set for at least 30 minutes before slicing into bars using the parchment paper overhang.
Serve and enjoy your festive 4th of July Sugar Cookie Bars!