In a medium size saucepan combine sugar and water. Scrape the seeds from the vanilla bean and add seeds and pods to the sugar water. Bring mixture to a boil, stirring occasionally. Remove from heat and cover for 20-25 minutes to steep vanilla bean and cool.
Remove vanilla bean pods from saucepan and discard. Store in an airtight container in the refrigerator for up to 1 month.
To Make Margaritas
To prepare glasses (optional): Moisten the outside rim of each glass with a lime wedge. Dab the rim into salt, while turning to coat outer edge. Fill each glass with ice.
Fill a cocktail shaker with ice. Pour in tequila, orange juice, lime juice, Grand Marnier, vanilla extract, and vanilla bean simple syrup. Shake to combine and chill. Strain into prepared glasses and garnish with an orange and lime wedge.