In a mixer, combine the softened butter and powdered sugar. Beat them together until fully combined.
Gradually add in the all-purpose flour, kosher salt, ground nutmeg, and pure anise extract. Mix until the dough becomes crumbly, then use your hands to bring it together into a ball.
Lay the dough onto a sheet of Saran wrap and roll it into a log shape. Wrap it up tightly and refrigerate for 30 minutes.
Preheat your oven to 350°F and line a baking sheet with parchment paper. Cut your chilled cookie log into 1/4 inch thick slices and lay them on the baking sheet.
Sprinkle with the festive red and green sugar. Place in the preheated oven and bake for 13-15 minutes.
Allow them to cool completely before transferring to an airtight container.