1. Preheat the oven to 350 degree F. Line thirty 2 1/2-inch muffin cups with paper bake cups; set aside. In a medium bowl, combine flour, baking powder, baking soda, and salt; set aside.
2. In a large bowl, beat butter with an electric mixer on medium to high speed for 30 seconds. Add granulated sugar and vanilla; beat until well mixed. Add eggs, one at a time, beating well after each addition. Add flour mixture and sour cream alternately to beaten mixture, beating on low speed after each addition just until combined. (The batter will be thick.) Stir in lemon peel.
3. Spoon about 1/4 cup of the batter into each prepared muffin cup.* Bake in the preheated oven about 18 minutes or until a wooden toothpick inserted in centers comes out clean. Cool completely on a wire rack. Makes 30 cupcakes.
Lemon Frosting: In a medium bowl, beat 3 tablespoons butter, softened, until fluffy. Gradually add 1 cup sifted powdered sugar, beating well. Gradually beat in 2 tablespoons lemon juice and 3/4 teaspoon vanilla. Gradually beat in 1 1/4 cups sifted powdered sugar. If necessary, beat in enough additional milk (2 to 3 teaspoons) to rmake spreading consistency. Stir in 1 teaspoon finely shredded lemon peel.
4. To make lemon frosting, in a medium bowl, beat butter with 1 cup powdered sugar, beating well. Gradually beat in lemon juice and vanilla. Gradually beat in additional 1-1/4 cups powdered sugar. If necessary, beat in enough additional milk (2 to 3 teaspoons) to make of spreading consistency. Stir in shredded lemon peel.
*Test Kitchen Tip: If all of the cupcakes do not fit in the oven at one time, refrigerate the remaining cupcakes while the first ones bake.