Preheat oven to 375 degree F. Gease and lightly flour two 8x1-1/2-inch or 9x1-1/2-inch round baking pans; set pans aside. Combine flour, baking powder, and salt; set aside.
In a large mixing bowl beat butter with an electric mixer on medium to high speed for 30 seconds. Add sugar and vanilla; beat until well combined. Add eggs, one at a time, beating 1 minute after each; Add flour mixture and milk alternately to beaten mixture, beating on low speed after each addition just until combined. Stir orange peel into batter. Pour batter into prepared pans.
Bake in preheated oven for 30 to 35 minutes or until a wooden toothpick comes out clean. Cool cakes in pans on wire racks for 10 minutes. Remove cakes from pans. Cool completely on racks.