SPRINKLE yeast and 1 teaspoons granulated sugar over warm water in large bowl; stir until dissolved. Let stand 5 minute Add remaining granulated sugar, milk, sour cream, vanilla, baking soda, salt and 4-1/2 cups flour; beat with mixer until well blended, stopping occasionally to scrape bottom and side of bowl. Stir in enough of the remaining flour to form soft dough.
PLACE dough on lightly floured surface. Knead 10 minute or until smooth and elastic, gradually adding remaining flour if dough is too sticky. Place in well-greased bowl; turn dough so top is greased. Cover with plastic wrap. Let rise in warm place 1 hour or until doubled in volume.
PUNCH down dough; place on sheet of lightly floured parchment paper. Roll into 12x9-inch rectangle. Use sharp knife or pizza wheel to cut dough into 48 (1-1/2-inch) squares; separate to allow 1 inch between squares. Cover with plastic wrap. Let rise in warm place 1 hour or until doubled in volume.
HEAT 1/2 inch oil in electric skillet to 350ºF. Gently stretch each square of dough lengthwise into rectangle. Carefully add in batches to hot oil. (Do not crowd dough.) Cook 2 minute or until each beignet is golden brown on both sides, turning after 1 minute Place in single layer on paper towel-covered baking sheets. When all beignets are cooked, sprinkle with powdered sugar.