Preheat oven to 350°F (175°C). Line a cupcake tin with paper liners.
In a medium bowl, whisk together flour, baking powder, and salt.
In a large bowl, beat the butter and sugar together until light and fluffy. Add the eggs one at a time, beating well after each addition.
Mix in the lime juice, tequila, and lime zest.
Add the dry ingredients in three batches, alternating with the milk, beginning and ending with the dry ingredients. Mix until just combined.
Divide the batter evenly among the cupcake liners. Bake for 20-25 minutes, or until a toothpick inserted into the center comes out clean. Let cool completely before frosting.
For the frosting, beat the butter until creamy. Gradually add the powdered sugar, mixing well. Add the lime juice, tequila, and lime zest, and beat until fluffy.
Frost the cooled cupcakes and garnish with extra lime zest if desired.