Preheat the oven to 350°F degrees. Line a large baking sheet with parchment paper. Unwrap all of the Hershey Kisses.
Whisk the flour, baking soda and salt in a medium bowl.
In a large bowl using a electric mixer or a stand mixer fitted with the paddle attachment, beat the butter and peanut butter together until well combined, 1-2 minutes. Add the white sugar and brown sugar and beat until light and fluffy, at least 2-3 minutes. With the mixer on medium low speed, add the egg, milk and vanilla and beat until combined.
Turn the mixer on low and gradually add the dry ingredients, scraping down the bottom and sides of the bowl as needed. Continue to mix until full incorporated.
Place the extra cup of granulated sugar in a small bowl. Use a heaping teaspoon to scoop the dough and roll them into 1-inch balls. Roll each ball in the sugar and place them in the prepared muffin tin.
Bake them for 8-11 minutes, until puffed and slightly golden around the edges. Immediately press the unwrapped Hershey's Kisses into the center of each cookie.
Cool them on the cookie sheet for a few minutes then transfer them to a cooling wrap to cool completely. The kisses will warm and soften from the warm cookies, but will set up again as they cool. Cookies stay fresh in an airtight container at room temperature for up to 5 days.