Preheat oven to 325° and line two cookie sheets with parchment paper.
In the bowl of an electric mixer fitted with the paddle attachment, cream butter and peanut butter on medium speed until well blended, scraping down the bowl as needed.
Add ⅓ cup granulated sugar and brown sugar and beat until light and fluffy. Add egg, milk, and vanilla and beat well, scraping down the bowl as needed.
In a separate bowl, stir together flour, baking soda, and salt. Reduce speed of mixer to low and gradually add flour mixture to peanut butter mixture and mix until just combined. Turn mixer off and scrape down sides of the bowl with a rubber spatula, ensuring all flour has been combined. Let the dough sit for about 10 minutes (see notes).
While dough rests, unwrap 48 Hershey Kisses and set aside. In a small bowl, add reserved cup of granulated sugar.
Roll the dough into 1 inch balls and then roll in granulated sugar. Place dough balls on parchment lined cookie sheets about 1 inch apart. Bake in preheated 325° for about 8-10 minutes, or until lightly brown.
Remove cookie sheets from oven and quickly press Hershey Kiss into center of each cookie; cookie will crack around edges. Remove from cookie sheet to wire rack and allow cookies to cool completely.
Cookies can be stored in airtight containers in the refrigerator for about 15 days. To stack in cookie tins, line the bottom with parchment paper and place parchment paper between each layer of cookies. Bring cookies to room temperature before serving.