"The decision of the 2nd Circuit will be taken to the Supreme Court," Jay Sekulow, an attorney for the President, said in a statement on Monday.
"The issue raised in this case goes to the heart of our Republic. The constitutional issues are significant."
On October 7, a federal judge in New York rejected a lawsuit filed by Trump in an attempt to avoid having to turn over his tax returns after the Manhattan District Attorney's Office sought to obtain the documents as part of an investigation into hush money payments made during the 2016 campaign, reports Efe news.
Trump's attorneys argued that the tax returns did not have to be released, citing presidential immunity.
The three-judge appeals panel, however, ruled on Monday that prosecutors had requested the tax returns and other documents from Mazars USA and not the President, and ordered the accounting firm to comply with a subpoena issued by the District Attorney's office.
"We hold, however, that any presidential immunity from state criminal process does not extend to investigative steps like the grand jury subpoena at issue here," the ruling written by the panel's chief judge, Robert Katzmann, said.
Trump contends that the investigation by the District Attorney's office is politically motivated and has fought efforts by prosecutors to obtain his tax returns.
Mazars USA, for its part, said it would comply with the appeals court's ruling.
"Mazars USA will respect the legal process and fully comply with its legal obligations... We believe strongly in the ethical and professional rules and regulations that govern our industry, our work and our client interactions.
"As a matter of firm policy and professional rules, we do not comment on the work we conduct for our clients," the accounting firm said in a statement.
While the Constitution does not require heads of state to release their tax returns, Trump is the first President since Gerald Ford (1974-1977) who has not made his tax return public each year.
( With inputs from IANS )