Preheat oven to 350°F. Grease and flour 3 (8-inch) cake pans. Line the bottoms with parchment paper rounds. Set aside.
In a small food processor, combine ¼ cup (57g) of the granulated sugar with the lemon zest. Process until the sugar turns yellow and the mixture resembles coarse sand.
In a large mixing bowl, combine the butter, the lemon zest/sugar mixture, and the remaining 1 ¼ cups of granulated sugar. Beat with an electric mixer until light and fluffy. Add the eggs, one at a time, mixing just until the yolk disappears.
In a small bowl whisk together the flour, baking powder, baking soda and salt. Set aside.
Add ½ of the milk to the sugar/butter mixture and blend on low until incorporated. The mixture may look like it split, but that’s okay. Next, add ½ of the flour mixture and mix on low until blended. Scrape down the sides and bottom of the bowl. Repeat.
Add the vanilla, lemon juice and poppy seeds. Using the spatula, gently fold the batter. Do not beat!
Divide the batter equally between the three prepared 8-inch cake pans. Tap the pans gently on a hard surface to release air bubbles. Bake until a toothpick inserted in the center comes out clean, about 15-18 minutes, rotating the pans after 10 minutes. Do not over bake!!! Cool in the pans for 10 minutes, then turn the cakes out and cool completely on a wire rack.