"The court found that the president is not above the law. He is not immune to ordinary criminal process," said Claire Finkelstein, director of the Center for Ethics and Rule of Law at the University of Pennsylvania.
The decision is a major legal defeat for Trump, although it remains highly unlikely the public will see the president's tax returns or financial records before Election Day. If the records are turned over in the grand jury probe, by law they must remain secret.
Chief Justice John Roberts, writing the 7-2 majority opinion, concluded that "no citizen, not even the President, is categorically above the common duty to produce evidence when called upon in a criminal proceeding."
Manhattan District Attorney Cyrus Vance is seeking 10 years of tax returns for Trump and his businesses as part of a probe into possible state tax fraud.
"The President is neither absolutely immune from state criminal subpoenas seeking his private papers nor entitled to a heightened standard of need," Roberts said.
But in a nod to the unique position of the presidency, Roberts returned the case to a lower court to allow Trump to "raise further arguments as appropriate," such as claims about the subpoenas' burden on his official duties.
"The president may raise constitutional and legal objections to the subpoena as appropriate," wrote Justices Brett Kavanaugh and Neil Gorsuch, the president's two appointees to the high court, in a concurring opinion.
"The court suggests the president is just like anybody else when it comes to certain kinds of legal actions," said ABC News legal contributor and Cardozo law professor Kate Shaw. "And here, just because he's the president, doesn't permit him to block this investigation from going forward."
Given the further proceedings, it was not immediately clear how soon the New York grand jury could potentially receive the documents.
“This is a tremendous victory for our nation’s system of justice and its founding principle that no one – not even a president – is above the law," Vance said in a statement. "Our investigation, which was delayed for almost a year by this lawsuit, will resume, guided as always by the grand jury’s solemn obligation to follow the law and the facts, wherever they may lead.”
Justices Clarence Thomas and Samuel Alito both filed dissenting opinions, suggesting President Trump deserves greater deference from subpoenas given the nature of his job.
"The court's decision threatens to impair the functioning of the presidency and provides no real protection against the use of the subpoena power by the nation's 2,300+ local prosecutors," Alito wrote.
Trump tweeted shortly after the decision came down that the matter is a "political prosecution."
But the president's attorneys said they were "pleased."
"The Supreme Court has temporarily blocked both Congress and New York prosecutors from obtaining the President’s tax records. We will now proceed to raise additional Constitutional and legal issues in the lower courts," Counsel to the President Jay Sekulow said in a statement on the New York case and on a second case involving four congressional subpoenas, also sent back to a lower court.
Three Democratic-led House committees are seeking a sweeping array of Trump personal and business records predating his time in the White House, including bank statements, engagement letters, personal checks, loan applications and tax returns -- information the lawmakers have called critical to drafting of new federal ethics and anti-corruption laws.
"Both of these cases involve short-term political wins for the president," said Shaw. "But they actually also both involve long-term wins for state authorities and congressional committees that try to hold the president accountable."
Later Thursday, Trump, speaking at a White House event, said he is partly satisfied with the rulings.
"The court rulings were basically starting all over again, sending everything back down to the lower courts and to start all over again, and so, from a certain point, I’m satisfied," Trump said during a roundtable with Hispanic leaders. "From another point, I’m not satisfied because frankly, this is a political witch hunt."
When Trump's personal accounting firm and three financial institutions used by him and his business were initially subpoenaed for the information, in both cases, Trump intervened to block the third parties from complying. He lost at every level in lower federal courts.
Trump is the only modern American president to have not publicly released tax returns or divest from major business interests while in office.
“The Supreme Court today confirmed that the president is not above the law. The court ruled that President Trump must follow the law, like the rest of us. And that includes responding to subpoenas for his tax records," said ACLU national legal director David Cole.
Finkelstein said the decision did not mean the public would immediately get to see the president's tax returns because grand jury proceedings are kept secret.
"It is possible that they would come out as part of trial if the president were, in fact, tried for crimes for which his financial records were available," Finkelstein told ABC News Live.
"The Court has now said, guess what, it is constitutionally permissible to investigate a sitting president," said Finkelstein. "And that has the backward implications that it is also potentially constitutionally permissible to indict a sitting president."
ABC News' Elizabeth Thomas contributed to this report.
This report was featured in the Friday, July 10, 2020, episode of “Start Here,” ABC News’ daily news podcast.
"Start Here" offers a straightforward look at the day's top stories in 20 minutes. Listen for free every weekday on Apple Podcasts, Google Podcasts, Spotify, the ABC News app or wherever you get your podcasts.