Santa's workshop is located on a remote mountaintop:

The trail begins in the south-east of the mountain:

Follow it and reach his workshop for further instructions. Light climbing is required. Dress warmly, bring provisions, don't forget to bring your list, and beware, for there are sure to be many grinches about, just waiting for the chance to ambush travelers on their pilgrimage to Santa's shop. Santa uses his own discretion to give gifts and has a tendency to audit the world's active crime scents before making decisions on whether to give gifts to those who ask for them. So keep that in mind before making the journey.
Starting from Limer's Outpost is the easiest method to get there from town. Take the wagon to the outpost, walk (or ride a horse) north until you reach the mountain. You may bring requests for multiple active town members or friends, but Santa isn't an idiot and will not be tricked by alt accounts. Be sure to include your account and character name in the letter to Santa.
Goodluck

Updated 1 - Players have until 11:59 PM EST December 23rd to submit their letters.