Preheat the oven to 350°F (175°C) and grease the cake pans. Line the bottoms with parchment paper
In a bowl, whisk together flour, baking powder, baking soda, and salt
In a large mixing bowl, cream the butter and granulated sugar until light and fluffy
Beat in the eggs one at a time, followed by the vanilla extract
Gradually add the dry mixture to the wet, alternating with the milk until fully combined
Pour the batter evenly into the prepared pans and bake for 25-30 minutes or until a toothpick comes out clean
Allow to cool in the pans for 10 minutes, then transfer to wire racks to cool completely
Color the water with desired food dye in a separate container
Level the cooled cakes, place the first layer on a serving plate, and fill with the colored water. Add remaining cake layers
Frost the exterior with softened buttercream and decorate as desired
Optionally, add edible decorations for a festive look.