Five Boro Bike Tour sued last week to avoid paying the NYPD nearly $1 million for traffic control.
The 40-mile event is scheduled for May 5.
The city contends it should be considered a "non-charitable athletic parade," which would make it subject to traffic-control fees.
But state Supreme Court Justice Margaret Chan on Wednesday questioned why the city didn't consider it a charitable event.
Organizers say the event raises money for public health causes, and the IRS recognizes it as a tax-exempt public charity.
The New York Times says the judge didn't think the group's charitable status "are questions for the Police Department."
She didn't issue a ruling.