In a large mixing bowl, beat together sugar and butter until creamy. Beat in eggs, vanilla and sour cream until fluffy. Mix in orange peel.
In a seperate bowl, combine flour, baking powder, baking soda, and salt. Gradually add flour mixture into creamed mixture. Beat until well-combined.
Divide dough in half and wrap each half in plastic wrap or wax paper. Chill for about 2 hours.
When dough is chilled, preheat oven to 400.
Roll dough on to lightly floured surface to about 1/8"-1/4" thickness. Cut with cookie cutters and place cookies on ungreased cookie sheets about 2" apart. (If desired, sprinkle with colored sugars). Bake at 400 for 6-9 minutes or until edges slightly golden. Cool about 2 minutes before removing to wire racks to cool.