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Combine soft butter, sugar and lemon zest in a large bowl and mix with an electric hand mixer on medium-high speed for 1-2 minutes until a bit pale and slightly fluffy.
Scrape down the sides and bottom of the bowl, then add the egg and mix until well incorporated. Add egg yolk, vanilla and lemon juice then mix until smooth and creamy.
Combine flour, baking soda, baking powder and salt in a medium bowl and whisk to blend evenly.
Add the dry ingredients to the bowl with the butter mixture and fold it in until evenly incorporated. The dough will be soft but not sticky at this point.
Cover the bowl and refrigerate the dough for 2 hours.
Preheat the oven to 350°F. Line two large cookie sheets with parchment paper.
Make the lemon sugar. Combine sugar and lemon zest in a small bowl and rub it together until the sugar smells fragrant.
Use a 1.25-oz cookie scoop to portion dough and roll into smooth balls. Roll the balls of dough in the sugar so they are evenly coated.
Place dough balls on the lined baking trays spacing them 3 inches apart and bake for 9-11 minutes until lightly golden on the edges and still slightly soft in the middle.
Let cookies cool for 2 minutes on the trays before transferring to a wire rack to cool completely.