In a bowl, whisk together flour, baking powder, and salt. Set aside.
In a separate large bowl, cream the butter and sugar together until light and fluffy.
Beat in the egg, vanilla, and peppermint extract until combined.
Gradually add the dry ingredients to the wet ingredients and mix until dough forms.
Divide dough in half. Tint one half with red gel food coloring and mix until evenly colored.
Roll out each dough half between two sheets of parchment to about 1/4-inch thickness. Chill both for 20 minutes.
Place red dough on top of white dough and trim edges to form equal rectangles. Gently roll into a tight log.
Wrap in plastic wrap and refrigerate for at least 2 hours, or until firm.
Preheat oven to 350°F (175°C). Line baking sheets with parchment paper.
Slice dough into 1/4-inch rounds and place on baking sheets. Sprinkle with crushed peppermint or sanding sugar if desired.
Bake for 10–12 minutes, or until edges are just set. Cool on baking sheets before transferring to a rack.