A federal appeals court ruled Monday that President Donald Trump's tax returns must be turned over to a state grand jury.
In a unanimous ruling, the three-judge appeals panel in New York rejected Trump's argument that he is immune as president from criminal investigation while in the White House.
Trump's lawyer, Jay Sekulow, said the president would ask the U.S. Supreme Court to overturn the ruling by the 2nd Circuit Court of Appeals.
"The decision of the Second Circuit will be taken to the Supreme Court. The issue raised in this case goes to the heart of our Republic. The constitutional issues are significant," Sekulow said in a statement.
Manhattan District Attorney Cyrus Vance Jr. is seeking eight years' worth of Trump's corporate and personal tax returns from his accounting firm Mazars as part of a criminal investigation.
Trump sued to block the subpoena that Vance's office sent to Mazars in September. The president's legal bid was dismissed in mid-October by a U.S. District Court judge, who balked at the "extraordinary claim" of immunity being argued.
Trump's lawyers had argued to the appeals panel that the president has absolute immunity during his time in office, not only from prosecution but even from a criminal investigation into his conduct before he was elected.
One of the president's attorneys, William Consovoy, had argued before the judges that Trump could shoot another person on Fifth Avenue in New York City and not be subject to arrest and prosecution until after he left office.
The appeals panel ruled that presidential immunity should be interpreted more narrowly.
"Any presidential immunity from state criminal process does not extend to investigative steps like the grand jury subpoena at issue here," the panel wrote.
A spokesman for the DA's office declined to comment on the 2nd Circuit's ruling.
"It's a victory for Vance," said Carl Tobias, the Williams Chair at the University of Richmond School of Law.
Vance is investigating, at the very least, how the Trump Organization accounted for hush money payments made to two women who claimed to have had affairs with Trump years ago. Trump has denied the affairs.
One of those women, porn star Stormy Daniels, was paid $130,000 by Trump's then-personal lawyer and fixer Michael Cohen, who later was reimbursed by Trump.
The other woman, Playboy model Karen McDougal, was paid $150,000 by the Trump-friendly publisher of The National Enquirer supermarket tabloid. Both payments were made shortly before the 2016 presidential election.
Cohen pleaded guilty last year to several crimes, including campaign finance violations in connection with facilitating the payments to Daniels and McDougal.
Cohen, who is currently serving a three-year federal criminal sentence, is cooperating with Vance's investigation.
— CNBC's Eamon Javers contributed to this report.