Preheat oven to 350 degrees. Line 6 8-inch cake pans with parchment paper around the bottom and spray with nonstick cooking spray. Set aside.
In a large bowl, make two cake mixes according to package directions with eggs, oil and water. Divide batter into 6 even portions. You can do this by eye or weigh the batter out and divide it by 6. Using the gel food coloring, color each bowl of batter brightly to make a rainbow using red, orange, yellow, green, blue and purple.
Pour each colored batter into the prepared pans and bake 13-17 minutes. Cool completely before frosting cake.
Make the Frosting:
Measure out the butter, powdered sugar and vanilla into a large bowl or the bowl of a stand mixer. Using a hand or stand mixer, start to combine the butter into the powdered sugar. With the mixer on, slowly stream in your milk tablespoon by tablespoon until it starts to come together and look creamy. If it hasn’t come together, add another tablespoon, mix and wait it out. After about 2 or 3 tablespoons, your frosting should be thick enough to hold its shape, but light enough to have a butter knife or rubber scraper run through it with ease.
Starting with the red cake on the bottom, layer the cakes up with vanilla frosting in between starting with red and ending with purple. Using the remaining frosting, frost exterior of cake smoothly. (If you want to do a crumb coat and refrigerate first and then finish the cake off with another layer of frosting, feel free to do that.) Decorate with rainbow sprinkles and serve.