In large bowl, whisk rice flour, tapioca starch, xanthan gum, baking powder and salt.
With an electric mixer, cream butter alternative and sugar until light and fluffy. Beat in applesauce and vanilla. With mixer on low, gradually add flour mixture; beat until combined.
Divide the dough into two discs. Wrap one disc in plastic wrap and refrigerate until ready to roll out.
Preheat oven to 350 degrees. Line 2 baking sheets with parchment paper. Cover work surface with saran wrap.
Place the dough disk that was not refrigerated, on top of the saran wrap on the work surface. Place a second layer of saran wrap on top of the dough disk and roll out 1/8 inch thick between the two sheets of saran wrap.
Cut shapes with cookie cutters. Using a spatula, transfer to prepared baking sheets. Reroll scraps; cut shapes. Repeat with remaining dough.
Decorate cookies with chocolate chips.
Bake, rotating halfway through, until edges are golden, 10 to 15 minutes (depending on thickness of cookies). Cool completely on wire racks.