Preheat the oven to 350°F and line a muffin tin with cupcake liners (12 muffins total).
In a medium bowl, whisk together the flour, baking powder and salt.
In a separate medium bowl, whisk together the sour cream, vanilla, lime zest, lime juice and tequila until combined.
In a bowl of stand mixer fitted with the paddle attachment (or mixing bowl with handheld electric mixer), beat the butter and sugar for 3 minutes on medium speed. Scrape down the sides of the bowl as needed.
Add the eggs one at a time and beat on medium-low just until combined. Scrape down the sides of the bowl.
Alternate adding the dry ingredients and liquid mixture into the butter mixture until just combined, mixing on medium-low speed.
Use a rubber spatula to fold everything together to ensure the batter is evenly combined.
Divide the batter among the 12 muffin cups, filling each cup a bit more than 3/4 of the way full.
Bake in the center rack of the oven for 23-25 minutes or until a toothpick inserted into the center comes out clean.
Let cool completely before icing.
While the cupcakes are baking (or cooling), make the frosting by beating the softened butter in a stand mixer fitted with a paddle attachment until creamy, about 2 minutes.
Add half of the confectioners sugar and beat until mixed through, then add the remaining confectioners sugar and beat again for 2 minutes.
Mix in the tequila and lime juice and beat the frosting for 2 more minutes until thick and fluffy, scraping down the sides of the bowl as needed.
Transfer the frosting to a piping bag fitted with a large star or round piping tip.
Pipe the frosting on top of each cooled cupcake.
Optionally, decorate the edges with thick decorating sugar, and top each cupcake with a lime slice/wedge and grated lime zest.