Lightly spray a 9x9 baking dish with nonstick spray or lightly butter it
Pour in the chocolate chips to evenly cover the bottom of the baking dish
Pour the sanding sugar into shallow bowls for dipping.
With sharp kitchen scissors or a knife, cut 5 marshmallows in half. Dip 9 of the cut halves into the blue sanding sugar and place them sugar side up on top of the chocolate chips, starting in the upper left corner for the blue part of the flag.
Cut 2 marshmallows to get 4 halves and dip into the red sanding sugar. Lay those on top of the chips in a stripes pattern on the top row next to the blue marshmallows.
Cut 2 more marshmallows and add those under the red marshmallows. (Dip in white sugar, if desired)
Continue the red and white rows until it looks like a flag. I used about 3/4 of the bag of marshmallows.
Bake 7-10 minutes until the marshmallows are golden brown on top and the chips are melted.
Serve with graham crackers for dipping or pretzels, apple slices, strawberries or Nilla wafers.