Preheat oven to 350F. Line baking sheet with parchment paper.
Cream together Sugar, Cream Cheese and the Key Lime zest until fluffy and add in Butter, Key Lime juice mixing well.
Beat in Egg and Milk.
Mix in the Flour, Baking Soda, Baking Powder, Salt and Coconut and blend in well.
Using a cookie scoop or Tablespoon (or use your hands to roll them), form 1 inch balls.
Place Powdered Sugar in a shallow bowl and roll each cookie ball in Sugar to cover. Place the Sugar Rolled Cookies on a prepared Baking Sheet 2 inches apart to allow for spreading.
Bake for about 10 - 14 minutes or until cookies have cracks and are a pale golden in color.
Allow to cool on cooling rack and Serve.
Makes 15 - 18 Cookies
Note: You can substitute Lemon, Orange or Grapefruit for the Key Limes.
Tip: To get the most juice out of your citrus, place them in the microwave for about 20 - 30 seconds, then roll on counter and proceed to juice.