Preheat your oven to 350°F (180°C) and grease and line three 8-inch round cake pans.
In a medium bowl, sift together the flour, baking powder, and salt. Set aside.
In a large bowl, cream together the butter and sugar until light and fluffy.
Add the eggs one at a time, mixing well after each addition. Stir in the vanilla extract.
Gradually add the dry ingredients to the wet ingredients, alternating with the milk, and mix until just combined.
Divide the batter evenly into six bowls. Add a different color of gel food coloring to each bowl and mix until well combined.
Pour each colored batter into the prepared cake pans, one color at a time, creating layers of the rainbow.
Bake in the preheated oven for 25-30 minutes, or until a toothpick inserted into the center of the cakes comes out clean.
Allow the cakes to cool in the pans for 10 minutes, then transfer them to a wire rack to cool completely.
Once the cakes are completely cooled, assemble the layers with your favorite frosting between each layer. You can use white frosting or a rainbow-colored frosting for a fun effect.
Decorate the top of the cake with additional frosting, sprinkles, or decorations as desired.
Enjoy!